What are Canada’s Free Trade Agreements

Canada currently has 14 trade agreements in force with over 51 countries around the world, and more in varying stages of negotiation. A Free Trade Agreement (FTA) is a treaty between two or more countries that encourages international trade by reducing or removing tariffs and other barriers to trade.

Statistics Canada reports that FTAs currently in force represents over 78% of Canada’s imports and 89% of the country’s exports in 2018. In addition to lowering and eliminating duty rates on certain products and services, FTAs also address modern trade challenges in areas such as labour, environment, certification, and intellectual property.

We provide more information below on Canada’s major trade agreements as well as a list of the FTAs currently in force. In addition, we have combined all of Canada’s trade and investment agreements and sanctions into an easy reference guide:

 

Canada’s Free Trade Agreements (pdf)

Canada-United States-Mexico Agreement (CUSMA)

The Canada-United States-Mexico Agreement (CUSMA) is trade agreement between Canada, the United States, and Mexico that replaced the North American Free Trade Agreement (NAFTA) on July 1, 2020. The largest free trade region in the world, in 2018, NAFTA surpassed $24 trillion in GDP with a market of over 480 million people.

CUSMA maintains the key aspects of the trade relationship between Canada, United States, and Mexico. It also incorporates new provisions to address current trade challenges and continuing to promote opportunities for North Americans.

We provide more information on CUSMA and what its entry into force means for Canadian importers and exporters in the following post.

 

CUSMA | Canada-United States-Mexico Agreement

Canada-EU Comprehensive Economic and Trade Agreement (CETA)

The European Union (EU) is Canada’s second largest trading partner. The Canada-EU Comprehensive Economic and Trade Agreement (CETA) is a bilateral trade agreement between Canada and the EU that entered into force on September 21, 2017. In its first three years in force, CETA increased annual trade of goods and services between Canada and the EU by over 21%.

CETA takes a phased approach to removing tariffs. Duties were removed on 98% of products and services upon entry into force. Over a seven year period, a further 1% of tariff lines will be phased out. By 2024, 99% of all Canadian goods entering the EU market duty-free.

The EU is the second-largest export destination and trading partner for the provinces of Newfoundland and Labrador, Nova Scotia, Ontario, Quebec, and Prince Edward Island. Therefore, these provinces benefit greatly from preferential access to the EU market.

Canada-UK Trade Continuity Agreement (CUKTCA)

On January 31, 2020, the United Kingdom (UK) formally left the EU and entered a transition period ending December 31. Subsequently, the countries reached a post-Brexit agreement on December 30, 2020, ensuring continued trade in goods without tariffs or quotas.

To minimize trade disruptions for businesses and workers, Canada and the UK signed a transitional agreement that came into force on April 1, 2021, called the Canada-UK Trade Continuity Agreement (CUKTCA).

Largely replicating CETA, the Canada-UK TCA ensures continued preferential access to the UK market for Canadian businesses. Similarly, 98% of Canadian products will continue to be exported to the UK tariff-free.

Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a free trade agreement between Canada and 10 other countries in the Asia-Pacific region, including Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Under CPTPP, most tariff lines became duty-free when the Agreement entered into force for each CPTPP country. Tariffs on other goods will be eliminated gradually over “phase-out” periods, which vary by country and are detailed in each country’s respective tariff elimination schedules.

Free Trade Agreements Currently in Force

FTA Countries In Force
 Canada-Chile Free Trade Agreement Chile July 5, 1997
 Canada-Columbia Free Trade Agreement Colombia August 15, 2011
 Canada-Costa Rica Free Trade Agreement Costa Rica November 1, 2002
 Canada-European Free Trade Association (EFTA) Iceland, Liechtenstein, Norway, Switzerland July 1, 2009
 Canada-EU Comprehensive Economic and Trade   Agreement (CETA) Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovak Republic, Slovenia, Spain, Sweden September 21, 2017
 Canada-Honduras Free Trade Agreement Honduras October 1, 2014
 Canada-Israel Free Trade Agreement (CIFTA) Israel January 1, 1997
 Canada-Jordan Free Trade Agreement Jordan October 1, 2012
 Canada-Korea Free Trade Agreement (CKFTA) Korea January 1, 2015
 Canada-Panama Free Trade Agreement Panama April 1, 2013
 Canada-Peru Free Trade Agreement  Peru August 1, 2009
 Canada-Ukraine Free Trade Agreement (CUFTA) Ukraine August 1, 2017
 Canada-UK Trade Continuity Agreement                 (Canada-UK TCA) Great Britain, Northern Ireland April 1, 2021
 Canada-United States-Mexico Agreement (CUSMA) United States, Mexico July 1, 2020
 Comprehensive and Progressive Agreement for the   Trans-Pacific Partnership (CPTPP) Australia, Japan, Mexico, New Zealand, Peru, Singapore, Vietnam (not yet in force for Brunei Darussalam, Chile, Malaysia, Peru) December 30, 2018

Sanctions

Canada imposes sanctions against several countries for violations against international laws and standards, such as violations of human rights, acts of corruption, and association with terrorism. For more information on Canadian sanctions and the countries upon which they are imposed, please visit Global Affairs Canada.

We Can Help

When importing and exporting we recommend researching the country you plan to conduct business with. Determining Free Trade Agreement status can help to reduce duty on your goods and services, as well as provide other trade incentives. To assist you, we have created a reference guide to Canada’s Free Trade Agreements and Sanctions. Our guide includes agreements in force as well as those under negotiation or being explored.

We also recommend staying up-to-date on changes to Canada’s FTAs by visiting Global Affairs Canada regularly.

Finally, if you have any questions on Free Trade Agreements or your Import/export activities, please contact us at [email protected].

 

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