Exporting from Canada: Understanding the Benefits Offered by Free Trade Agreements (“FTA”)
Since 2025, changes in U.S. tariff policies spurred a need for Canadian businesses to diversify trade and expand into other markets. Traditionally, Canada’s trade performance relied heavily on proximity to and stable trading relationship with the United States than on firm-level efficiency and competitiveness (see report by Deloitte). Once the United States imposed tariffs on Canadian imports, it revealed that overreliance on the U.S. market meant Canadian companies were among the least prepared to react quickly when trade rules suddenly changed. This highlighted a need for Canadian companies to adopt new strategies such as diversifying trade.
This year in 2026, Canadian businesses will likely continue to face challenges due to ongoing U.S. tariffs, the CUSMA review, and increasing diversion of unfairly priced goods into the Canadian market. Most recently, the United States proposed new tariffs of 10% additional duties on imports from Canada. As such, adopting strategies to reduce reliance on a single market (i.e., the United States) and expanding sales by growing exports to other markets will help Canadian businesses protect themselves.
What the FTAs can offer
As Canadian businesses prepare to enter into other markets, they should consider the many trade compliance requirements. As mentioned in our blog, compliance considerations include obtaining export permits and considering sanctions imposed on specific markets.
That said, beyond compliance requirements, Canadian businesses interested in exporting their products abroad can take advantage of numerous competitive benefits available under 15 different free trade agreements (“FTA”). Under the FTAs, benefits that may be available to businesses include:
Reduced or eliminated customs tariffs and duties;
Eased sourcing and exporting which may result in having more globally integrated supply chains;
Access to additional markets which reduces reliance on a single market;
Reduced trade barriers that allow access to new customers in other countries.
The number of FTAs and thereby the number of markets into which Canadian businesses can enter may expand. Since 2025, Canada has made significant efforts to help Canadian businesses find new international markets for Canadian products. In January 2025, Canada’s FTA with Ecuador was concluded. Additionally, Canada has either agreed to formally launch or formally launched negotiations to enter into FTAs with the Mercosur Bloc (Argentina, Brazil, Paraguay, Uruguay), the United Arab Emirates, Thailand, and India.
FTAs offer preferential duty treatments and Canadian businesses are encouraged to explore how these FTAs can be used to reduce or eliminate customs tariffs and duties as they enter into a new market.
Takeaway
Canadian businesses should review the free trade agreements in place to identify new opportunities and reach out to our team to help understand how they can benefit from preferential tariff treatments offered by such FTAs.
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