Summary

• The European Commission proposes that the EU Council adopt a position in the CETA Joint Committee to include active pharmaceutical ingredients (APIs) as medicinal products in the GMP Protocol (the protocol that recognises good manufacturing practices for drugs).
• CETA (Comprehensive Economic and Trade Agreement) was signed on 30 October 2016 and has been provisionally applied since 21 September 2017.
• The GMP Protocol is part of CETA and aims to make it easier for medicines and drugs to be traded between Canada and the EU by recognising each other’s GMP certificates.
• The Joint Committee, set up under Article 26.1 of CETA, can agree on amendments to the protocol.
• In 2018 Canada asked to be recognised as a country that protects public health for active substances exported to the EU.
• The Commission reviewed Canada’s system, did an on‑site audit in June 2022, and in January 2023 amended the list of recognised third countries to include Canada.
• Health Canada also assessed EU authorities and confirmed that the two systems are equivalent.
• On 15 December 2022 the Joint Sectoral Group (a sub‑group of the Joint Committee) recommended that APIs be added to the operational scope of the GMP Protocol.
• The proposed decision will support that recommendation, making the inclusion of APIs binding under international law once Canada completes its internal procedures.
• The legal basis for the decision is Article 218(9) of the Treaty on the Functioning of the European Union (TFEU) and Article 207(4) TFEU.
• The decision will be published in the Official Journal of the European Union after it is adopted.
• The draft decision (to be adopted by the Joint Committee) will amend Annex 1 of the GMP Protocol by adding “(h) active pharmaceutical ingredients.” and will enter into force on the first day of the second month after Canada notifies the EU that it has finished its internal requirements.

Broader context

Active pharmaceutical ingredients (APIs) are the chemically active substances in a medicine that actually do the work — for example, paracetamol is the API in a painkiller tablet. They are different from finished medicines (the tablets, capsules, or syrups you buy), which are the product after the API has been processed and packaged.

Before a finished medicine can be made, its API usually needs to be manufactured and inspected somewhere. Right now, both the EU and Canada separately inspect API factories to check they follow safe manufacturing rules (called GMP — Good Manufacturing Practices). That means the same factory can be inspected twice: once by EU authorities and once by Canadian authorities. This decision would allow the mutual recognition of inspections and official documents for APIs, reducing costs from these duplicative inspections.

The finished medicines covered by the GMP Protocol are already handled this way — inspections are mutually recognised. APIs were simply left out when the protocol first came into force, and this document closes that gap.

This change is expected to particularly benefit small and medium-sized businesses, and to contribute to greater pharmaceutical supply chain resilience.

The broader geopolitical backdrop matters too. Much of the world's API supply is concentrated in a small number of countries, particularly China and India. Strengthening the EU–Canada pharmaceutical relationship is part of a wider effort by Western countries to reduce dependence on those supply chains and ensure medicines remain available during crises.

Impact on people living in the EU

For most people in the EU, the change will be invisible in daily life — medicines will look and work exactly the same. The benefit is indirect: by cutting unnecessary bureaucratic costs for pharmaceutical companies trading between the EU and Canada, medicines produced from Canadian APIs may become slightly cheaper or more reliably available. More importantly, it strengthens the EU's access to a trusted source of pharmaceutical ingredients outside of Asia, which helps protect against shortages.

There is no reduction in safety. Both sides have already verified that each other's manufacturing standards are equivalent, so accepting Canada's inspections does not mean lower scrutiny — it means trusting a system that has already been checked and confirmed to be just as rigorous as the EU's own.

Impact on people living in Canada

The same logic applies in reverse. Canadian drug manufacturers importing finished medicines or APIs from the EU face fewer administrative hurdles, and Canadian patients benefit from the same supply chain resilience gains. Canadian companies exporting drugs to any EU Member State that fall within the scope of the CETA Protocol may benefit from specified GMP exemptions. Adding APIs to that scope extends those exemptions to an earlier and larger part of the supply chain.