Canada's International Market
Access Report - 2008

Chapter 8
Opening Doors to Europe

European Union

Comprising 27 member states, the European Union is the world's largest single market, foreign investor and trader. The EU represents Canada's second largest trading partner (both in goods and services) after the United States, and is the second most important source of FDI and destination for direct investment abroad. Key growth sectors of interest to Canadian companies include information and communications technologies, aerospace and defence, life sciences, agriculture and agri-food, and environmental products, services and technologies.

For Canada, the EU is a key partner in science and technology (S&T) and our second most important source of new technologies- helping to further Canada's goal of becoming a world-leading knowledge-based economy. The EU produces over a third of the world's scientific publications and some 20% of its patents. It is the top producer of technology in the Organisation for Economic Co-operation and Development (OECD)⁸. S&T cooperation is enabled by government-level agreements as well as agreements between Canadian and European S&T-oriented institutions and businesses.

Although the large EU market offers important commercial opportunities for Canada, it also presents certain challenges. Among these are restrictions by some member states on mergers and acquisitions, market distortions in agriculture, uneven harmonization of regulations among member states, and a number of EU-imposed bans and restrictions related to health, environmental and consumer protection concerns.

At the 2007 Canada-EU Summit, leaders agreed to cooperate on a study to assess the benefits of a closer economic partnership and committed to reviewing its results at the 2008 Summit, with a view to pursuing closer future economic integration. Canada and the EU also committed to concluding a regulatory cooperation agreement as soon as possible, and agreed to open negotiations toward a Canada-EU comprehensive air services agreement to improve links between their respective aviation markets.

Canada and the EU have in place a Framework on Regulatory Cooperation and Transparency (signed in December 2004). The Framework is implemented by the Canada-EU Roadmap for Regulatory Cooperation, adopted by leaders at the June 2007 Canada-EU Summit in Berlin. The Roadmap advances new and existing sector-specific, agreed-upon areas of regulatory cooperation.

The Canada-EU commercial relationship is formally managed through several long-standing mechanisms, including the Trade and Investment Subcommittee. Here, Canada can raise Canadian companies' concerns directly with the European Commission and work toward resolving them.

European Free Trade Association

The European Free Trade Association countries of Iceland, Liechtenstein, Norway and Switzerland are developed, modern economies that offer state-of-the-art technology as well as significant potential markets for Canadian firms. The EFTA region is the world's 16th largest trader in merchandise goods, and its members have some of the highest GDPs per capita in the world, ranking among the top 10 countries⁹. For more information on the EFTA free trade agreement, please see Chapter 4, "Regional and Bilateral Free Trade Agreements and Other Initiatives."

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⁸ Organisation for Economic Co-operation and Development, OECD Science, Technology, and Industry Scoreboard, 2007 [online], October 2007, http://caliban.sourceoecd.org/vl=7342151/cl=20/nw=1/rpsv/sti2007/.

⁹ These statistics exclude Liechtenstein

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