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

CETA is a trade agreement between the EU and Canada that removes most tariffs and makes it easier to trade goods and services. The part about good manufacturing practices (GMP) for pharmaceutical products is a special arrangement. It means that if Canada certifies that a drug is made according to good standards, the EU accepts that certificate without re-inspecting the factory. This saves time and money.

Active pharmaceutical ingredients (APIs) are the actual chemical substances that make a medicine work. For example, paracetamol is the API in a painkiller tablet. Until now, the GMP agreement between the EU and Canada only covered finished medicines (like tablets or injections), not the raw ingredients. Adding APIs closes that gap. That means both sides now trust each other’s inspections for the whole production chain, from raw material to finished pill.

The EU already recognised Canada as a trusted country for APIs in its own internal rules (changed in January 2023). But the CETA change makes this mutual and legally binding under international law. Canada must complete its own internal steps before the change takes effect.

Impact on people living in the EU

For most people in the EU, this change will be invisible but useful. It helps prevent shortages of medicines. When APIs can move more easily between the EU and Canada, drug companies have more options to buy from. That means if one supplier has a problem, another can step in faster. It also helps keep prices stable, because companies spend less on duplicate inspections and paperwork.

The change also supports medicine safety. Since both sides accept each other’s inspections, regulators in the EU can focus their limited resources on inspecting factories in countries that are not yet trusted, rather than repeating work already done by Canadian authorities.

For patients, this means the medicines you get from your pharmacy are just as safe as before, but the system behind the scenes works more efficiently. There is no direct change to prescriptions, costs, or availability that you would notice day to day.

Impact on people living in Canada

For Canadians, the effect is similar. Canadian regulators will no longer need to inspect EU factories that make APIs for finished drugs sold in Canada, because they trust the EU’s inspections. This reduces costs for Canadian drug companies and helps prevent medicine shortages in Canada as well. The change is part of a two-way street that benefits both sides.