What is CETA – and why is the EU-Canada trade deal still in limbo?

CETA, or the Comprehensive Economic and Trade Agreement, is a trade partnership between the European Union and Canada that aims to foster economic and security ties. Signed in 2016, the agreement saw almost all tariffs removed, significantly boosting transatlantic trade in goods and services. However, the deal remains incomplete as ten EU countries have yet to ratify it.

The EU-Canada trade deal, signed after seven years of negotiations, eliminated tariffs on 98% of goods exchanged between the two regions, impacting industries like wine, cars, chemicals, financial services, telecommunications, and transport. It also opened the Canadian market to European companies and protected 143 European agricultural products with geographical indications (GIs) from imitation.

Despite its provisional implementation in 2017, CETA has faced resistance due to concerns over food safety, environmental standards, and unfair competition. Critics argue that some Canadian production rules are less stringent than those in the EU, while farmers worry about the impact on their businesses. Additionally, the Investor-State Dispute Settlement provisions, which allow companies to challenge discriminatory laws before an arbitration tribunal, have been criticized for potentially favoring business lobbies.

As a result, the Commission replaced this mechanism with an Investment Court System featuring permanent judges and an appeal process.

The ratification process has been blocked in several EU member states, including France, Poland, and Italy. France's Senate rejected the deal in 2024, while Poland and Italy have also frozen the process due to concerns over GIs and competition. With no clear timetable in sight, the future of CETA remains uncertain as EU countries continue to grapple with these issues.