The European Union and Canada have officially begun negotiations on a new Digital Trade Agreement (DTA) aimed at making cross-border digital business easier, safer, and
more predictable.
The talks were launched yesterday in Toronto by Maroš Šefčovič, the European Commissioner for Trade and Economic Security, and Maninder Sidhu, Canada’s Minister for International Trade. The proposed agreement is designed to modernize the digital dimension of trade between the EU and Canada, building on the success of the Comprehensive Economic and Trade Agreement (CETA), which has been in force for nearly a decade.
Officials say the new deal will help businesses operate more easily online across borders while strengthening consumer protections in the digital marketplace.
Strengthening digital trade rules
The Digital Trade Agreement aims to establish clear and predictable rules for companies and consumers engaged in digital commerce. At the same time, both partners want to preserve their ability to regulate emerging challenges in the digital economy.
One of the key priorities is improving trust in online transactions. The proposed framework would introduce strong consumer protections covering personal data, privacy, and safeguards against unsolicited commercial communications. Officials believe these measures will boost confidence among consumers using digital services.
The negotiations also seek to simplify digital business processes. Plans include promoting paperless trade and ensuring that electronic signatures, digital contracts, and e-invoices are legally recognized on both sides of the Atlantic. Another goal is to maintain the long-standing practice of not imposing customs duties on electronic transmissions.
Protecting fair competition
Negotiators are also focusing on ensuring a fair digital marketplace. The agreement is expected to prohibit unjustified data-localisation requirements and prevent governments from forcing companies to hand over software source code. These rules are designed to shield businesses from protectionist measures and support open digital markets.
Building on a strong trade relationship
The new negotiations follow discussions held during the EU–Canada Summit 2025 in June last year, where leaders agreed to deepen economic cooperation and diversify their trade partnerships. A preliminary scoping exercise was completed in September 2025, and early discussions began in February 2026.
Since the implementation of CETA nine years ago, trade between the European Union and Canada has grown significantly. Trade in goods has increased by 76%, reaching more than €81 billion, while trade in services has surged 97% to nearly €51 billion.
The Digital Trade Agreement is expected to complement CETA by addressing the rapidly evolving digital economy.
Digital economy becoming central to global trade
The agreement will also build on the EU–Canada Digital Partnership, signed in December 2023. While that partnership established a framework for cooperation in areas such as regulation and research, the new DTA would introduce legally binding commitments for digital trade.
The timing reflects the growing importance of digital commerce globally. More than 60% of global GDP is now linked to digital transactions. The EU remains one of the world’s largest exporters and importers of digitally deliverable services, including telecommunications, financial services, insurance, and IT.
By 2023, over half of the EU’s services trade—worth more than €1.3 trillion combined in imports and exports—was conducted digitally.
If concluded, the EU-Canada Digital Trade Agreement could become one of the most comprehensive frameworks for digital commerce between two major advanced economies, setting new standards for global digital trade rules. Photo by Christopher Lancaster from Toronto, Canada, Wikimedia commons.