Canada and EU near digital trade deal ahead of Montreal summit

OTTAWA · Canada and the European Union are closing in on a digital trade agreement aimed at making cross-border business easier for companies. International Trade Minister Maninder Sidhu was in Ireland on Thursday to push negotiations forward ahead of next week's Canada-EU Summit in Montreal. In a statement, Sidhu said the two sides are "closing in on an agreement" to help "create less friction" around key digital commerce issues. He noted Canada exported nearly $15 billion in digital services to the EU in 2024, with potential for further growth under a new deal.

The agreement under negotiation focuses on several technical areas designed to modernize trade. These include establishing common rules for electronic signatures and contracts, moving toward paperless trade documentation and ensuring secure cross-border data flows. The deal would also address customs duties on electronic transmissions and set a framework for e-commerce. Sidhu's statement framed these measures as ways to reduce administrative burdens and costs for businesses operating between Canada and the EU.

Broader political context

The push for a digital trade pact comes as Prime Minister Mark Carney has been working to establish closer links with Europe. European Commission President Ursula von der Leyen has previously suggested Canada could become the first associate member of the European Union. The upcoming summit in Montreal is expected to announce the next steps in this deepening partnership. The digital agreement is seen as a concrete component of that broader political and economic alignment. Sidhu's statement detailed that the agreement aims to "create less friction" specifically around e-signatures and e-contracts, paperless trade, secure cross-border data flows, duties on electronic transmissions and e-commerce. He said there is an opportunity now to grow digital services exports further with an agreement in place. The negotiations have been continuing, with Sidhu's trip to Ireland representing a final diplomatic effort before leaders convene.

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A strategic trade priority

The negotiations reflect Canada's ongoing effort to diversify its trade relationships and reduce reliance on any single market. Nosy Mag reported in September that International Trade Minister Maninder Sidhu was seeking trade deals at the G20 amid tensions with the United States. A digital agreement with the EU, a bloc of 27 nations, would provide Canadian firms with more predictable rules for selling services online to a massive consumer base. The $15 billion in digital services exports cited by Sidhu shows the existing commercial relationship.

Finalizing the agreement would provide a tangible outcome from the Montreal summit, where leaders from both sides will meet. The deal's provisions on data flows are particularly significant for technology companies that move large amounts of information across borders. By aligning standards on e-signatures and e-contracts, the pact would also help smaller businesses engage in international trade with less legal complexity. The two sides are expected to announce the next steps in the deepening partnership at the Canada-EU Summit. The summit takes place next week in Montreal. Prime Minister Mark Carney and European Commission President Ursula von der Leyen are scheduled to attend. The digital trade agreement negotiations are a key item on the agenda, with officials aiming to conclude the deal to facilitate easier buying and selling across borders for businesses.

With files from The Canadian Press, Global News and CityNews