Canadian exporters face hurdles as EU industrial policies favor local manufacturing over imports despite CETA tariff benefits.
Canada’s push to diversify exports away from the U.S. to the EU is stalling as Brussels tightens industrial policies. EU procurement rules, subsidies, and local content requirements increasingly favor European manufacturers, complicating Canadian access despite the Canada-EU Comprehensive Economic and Trade Agreement (CETA).
Since CETA’s 2017 implementation, Canada’s EU export share rose just one percentage point to 5.5%, with most gains driven by commodities like crude oil and aluminum. Manufacturing exports remain stagnant, forcing firms to consider local EU production to secure contracts.
The shift underscores the limits of trade deals in countering protectionist trends, particularly in public-sector procurement. Canadian exporters may need to adapt strategies to maintain competitiveness in the EU market.