Montreal, September 09, 2026 — A new report from Canadians for Justice and Peace in the Middle East (CJPME) warns that despite recognition of Palestinian statehood bilateral trade under the Canada-Israel Free Trade Agreement (CIFTA) still economically integrates the Occupied Palestinian Territories (OPT) and illegal Israeli settlements into the State of Israel, running counter to international law and official Canadian foreign policy opposing settlements. Titled Annexing Palestine Through Trade: The Canada-Israel Free Trade Agreement and the Occupied Palestinian Territories, the report provides an updated analysis of Canada’s trade policy with Israel and Palestine in light of the international law context of the last three years, and provides further evidence to support Canada’s proposed restrictions on settlement trade.
The new analysis incorporates recent policy developments, including the landmark International Court of Justice (ICJ) July 2024 Advisory Opinion and Canada’s formal recognition of the State of Palestine on September 21, 2025 into its previous framework. Despite these legal milestones, CIFTA continues to operate under an anachronistic geographic scope from 1997 defined as "the territory where [Israel's] customs laws are applied," granting preferential trade terms to goods originating from Israel’s illegal West Bank settlements.
"Canada’s current policy with Israel is incoherent," said Dr. Michael Bueckert, Vice-President with CJPME and lead author of the report. "While Ottawa officially opposes illegal settlements and recognizes the State of Palestine, through CIFTA Canada actively rewards illegal occupation and settlement expansion with preferential trade treatment. Treating illegal colonies in occupied territory as part of Israel through trade deals facilitates violence against Palestinians and de facto annexation on the ground."
The report notes a recent shift in international trade policy toward settlement goods and services. Several European nations—including Spain, Ireland, Belgium, and the Netherlands—have moved past technical labeling rules to enact full national bans on settlement trade and services in the last year, and yesterday Canada announced alongside 11 European countries that it intends to introduce similar measures. Domestically, Canadian public opinion reflects a desire for policy reform. A June 2026 Nanos Research survey commissioned by CJPME found that 54% of Canadians support either cancelling CIFTA (26%) or reforming it to exclude settlement goods (28%), while 86% affirmed that human rights should be a central consideration in Canada's trade relationships.
"Technical labeling and tariff adjustments have proven insufficient to stop settlement trade across the EU and the UK," added Alex Paterson, Senior Director with CJPME and report co-author. "Following recognition and the ICJ advisory opinion, Canada must take decisive action to align its trade policies with its international law obligations and learn from the European experience. The easiest way to do this is through banning trade with settlements, applying full sanctions on settlements, and the termination of CIFTA."