Canada’s Free Trade Agreements Canada’s Free Trade Agreements Did you know? Canada’s total trade is worth more than two-thirds of its GDP ($1.7 trillion USD) and approximately 75% of this value occurs between countries that have entered in a Free Trade Agreement? Canada’s Free Trade Agreements gives Canadian companies preferred access to international markets by removing trade barriers like tariffs, regulations, and certifications. While NAFTA is the best known, Canada currently has Free Trade Agreements at varying stages of implementation with over 40 countries. North American Free Trade Agreement (NAFTA) Created in 1994, the North American Free Trade Agreement (NAFTA) is the largest free trade region in the world. It is estimated that, by the end of 2018, the NAFTA area GDP surpassed $24 trillion with a market of over 480 million people. On November 30, 2018, Canada, the United States, and Mexico signed a new free trade agreement, the Canada-United States-Mexico Agreement (CUSMA). After further negotiation, a revision was signed on December 10, 2019, with the agreement now awaiting ratification by each country. On March 13, 2020, the Government of Canada passed Bill C-4, the Act to implement the CUSMA. With Canada being the last of the three countries to ratify the agreement, CUSMA is expected to enter into force and replace NAFTA on June 1, 2020. CUSMA maintains the key features of the trading relationship between Canada, United States, and Mexico while incorporating new and updated provisions to address current trade issues and promote opportunities for North Americans. We provide more information on CUSMA and what its entry into force means for Canadian importers and exporters in our post CUSMA to Replace NAFTA on June 1. 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) was signed on October 30, 2016 and entered into force on September 21, 2017. In its first two years, CETA generated significant benefits and increases in trade between Canada and the EU. Newfoundland and Labrador, Nova Scotia, Ontario, Quebec, and Prince Edward Island stand to benefit greatly from preferential access to the EU market; it is already the second-largest export destination and second-largest trading partner for these five provinces. Once fully implemented, CETA will remove tariffs on almost all exports and provide access to new market opportunities. Exporters will also benefit from improved conditions for export. Sanctions Canada imposes sanctions against certain countries, individuals, and entities to prevent the concealment and transfer of funds or assets used to finance terrorism. For more information on Canadian sanctions and the countries upon which they are imposed, please visit Global Affairs Canada. Importing or Exporting? When considering importing or exporting we recommend researching the country you plan to conduct business with to determine the Free Trade Agreement status. To assist you, we provide a reference guide to Canada’s Free Trade Agreements and Sanctions (downloadable PDF), including those in force as well as those under negotiation or being explored. Due to ongoing changes to trade legislation, we suggest contacting us or checking the listed websites or visiting Global Affairs Canada regularly. For more information on Canada’s free trade agreements or any matters related to your Import/export requirements, please contact your local PF Collins office.