Merchandise trade between Canada and the EU has increased since CETA entered into provisional application. It reached €66.8 billion in 2019, a 27.0% increase compared to 2016. The annual average growth rate of Canada-EU bilateral trade has increased from 4.4% during the period of 2011- 2016 to 7.9% in 2018-19 (Statistics Canada). Canada’s pre-CETA goods exports to the EU increased by 25.0%, to reach €20.9 billion in 2019, while the EU’s pre-CETA goods exports to Canada increased by 28.0%, to reach almost €46 billion in 2019 (Statistics Canada).
Figure 1: Canada-EU Services Trade, in €billion.(Source: Eurostat, Statistics Canada – Modified Figure)
Canada-EU services trade has increased 39% between 2016-2019, with Canadian service exports to the EU increasing 36.6% and EU services exports to Canada increasing by 40.6% (Statistics Canada).
The three main categories of Canadian services exports to the EU were a) other business services (i.e., R&D, legal services, accounting, public relations, consultancy, professional services), b) transportation and c) travel services. These accounted for 70% of total services trade in 2019. From 2016 to 2019 a) other business services increased 43% (€2.8 billion to €4 billion), b) transport services increased 21.8% (€2.4 billion to €2.9 billion) and c) travel services increased 34.5% (€2.2 billion to €2.9 billion) (Statistics Canada).
The main three categories of EU services exports to Canada in 2019 were a) commercial services, b) transportation services, and c) travel services. EU exports of a) commercial services to Canada increased 34.6% (€2.8 billion to 3.8 billion), b) transportation services increased 31.7% (€3.3 billion to €4.3 billion) and c) travel services increased 43.7% (€3.7 billion to €5.3 billion) (Statistics Canada).
Figure 2: Canada-EU Services Trade, in €billion (Source: Eurostat, Statistics Canada – Modified Figure)
The EU has expanded its market share in Canada, from 9.9% in 2016 to 11.3% in 2019. It is the second most important partner to Canada in merchandise trade, after the United States. Canada’s market share in the EU increased from 1% to 1.2%, a noticeable improvement considering the size of the EU’s total imports. Canada is the EU’s 11th most important trading partner (Statistics Canada).
Canadian merchandise exporters increased their presence in the EU market, with 6.9% of new firms actively exporting to the EU. Similarly, EU 5,000 new firms – or a 5% increase compared to 2016 – exported to Canada in 2018 (Statistics Canada).
Sector performance
The largest absolute value increases in total Canada-EU trade in goods have been in: a) machinery, b) pharmaceutical products, c) ores, slag and ash, d) mineral fuels, and e) motor vehicles and parts. These five categories accounted for 48.7% of the total Canada-EU bilateral trade in 2019 (Statistics Canada).
Trade in Environmental Goods
Canada and the EU both share concerns over climate change, increase trade in environmental goods. Total bilateral trade in environmental goods increased 17.2% (€6.1 billion to €7.1 billion) between 2016-2019. Canadian exports increased 23% from 2016 to €1.6 billion in 2019, whereas EU environmental goods exports increased 15.8% (€4.8 billion to €5.5 billion) between 2016-2019 (Statistics Canada).
Figure 3: Canada-EU Trade in Environmental Goods, in €million (Source: Eurostat, Statistics Canada – Modified Figure).