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Canada's Free Trade Agreements



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What Are Trade Agreements?

There are two major types of trade agreements: free trade agreements (FTAs) and foreign investment promotion and protection agreements (FIPAs).

  • Free Trade Agreements (FTAs): Focus on reducing or eliminating tariffs and other trade barriers.
  • Foreign Investment Promotion and Protection Agreements (FIPAs): Protect foreign investors from unfair treatment by host governments.

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How Free Trade Agreements Work

The basic goal of a free trade agreement is to reduce the tariffs on the goods manufactured in one country and sold in another. They can also cover non-tariff barriers such as quotas, product standards, labour mobility and intellectual property. They can be bilateral (e.g., Canada-Korea FTA) or multilateral (e.g., CUSMA - Canada-US-Mexico Agreement).


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Benefits of Free Trade Agreements

A free trade agreement may eliminate or reduce tariffs and other trade barriers. This can enable companies to offer a lower price for their goods in that market, which increases competitiveness and consequently sales and profits. It also gives companies an opportunity to expand their global customer base and increase their international sales.


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Key Trade Agreements

CUSMA is a modernized free trade agreement between Canada, the United States and Mexico. It replaces NAFTA and strengthens trade among the three countries by enhancing market access, promoting fair competition and supporting innovation and growth.

Benefits of CUSMA for Businesses:

  • allows tariff-free exports to the U.S. and Mexico, which helps boost sales, lower costs and enhance price competitiveness
  • simplifies customs procedures, which helps speed up shipments and improve delivery times
  • provides exporters with preferential access to new markets and potential customers

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CETA is a free trade agreement that aims to eliminate or reduce tariffs and other trade barriers, boost economic growth and enhance bilateral market access between Canada and the European Union (EU) by covering nearly all aspects of trade. Under CETA, 99 per cent of EU tariff lines are duty free.

Benefits of CETA for Businesses:

  • eliminates or lowers trade barriers, tariffs and export related costs
  • allows Canadian companies to bid on tenders at all levels of EU government
  • promotes high-quality investment between the EU and Canada

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CPTPP is a free trade agreement in force between Canada and 10 other countries in the Indo-Pacific region: Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Benefits of CPTPP for Businesses:

  • eliminates tariffs and reduces barriers for exports to CPTPP members
  • provides opportunity for Canadian companies to stay competitive with domestic suppliers when bidding on government procurement opportunities with CPTPP members
  • increases certainty, stability and protection for investments and secure access to the Canadian and Indo-Pacific markets

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The Canada-U.K. TCA provides Canadian businesses, exporters and investors with extensive preferential access to the U.K. market, including the elimination of 99 per cent of tariffs on Canadian goods while preserving the benefits of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA).

Benefits of TCA for Businesses:

  • provides Canadian exporters with continued preferential access to the U.K. market and reduces tariffs on the majority of Canadian exports to the U.K.
  • provides Canadian companies with access to procurement opportunities with the U.K. government
  • offers important investor protections while preserving the Government of Canada's right to regulate in the public interest

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For a full list of Canada's International Trade Agreements, please visit: Trade agreements, negotiations and consultations


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