What does Canada’s approach to the EU mean?

Canada and the EU are aiming for closer cooperation, with a joint goal of becoming less dependent on the major economic blocs of the US and China. What role does US President Trump’s tariff policy play in this? And what decisions might be made at the EU-Canada summit at the end of October?

To this end, Canada is seeking associate membership of the EU, Canadian Prime Minister Mark Carney explained last week in a speech to the European Parliament in Strasbourg. In doing so, he welcomed a corresponding proposal from European Commission President Ursula von der Leyen. Europe and Canada are stronger together, said Carney.

Carney’s push for closer cooperation with the EU provoked a sharp reaction from Washington whilst he was still in Strasbourg. US President Donald Trump described the idea of Canada’s associate membership of the EU as “ridiculous” but, in the same breath, threatened Europe with further tariffs should the US regard the planned rapprochement as “hostile”. Von der Leyen said that the proposed partnership was not directed against others but was intended to enhance the combined strength of Europe and Canada.

Carney, too, presents his policy as one of diversification rather than a shift away from the US. An alliance between Canada and the EU could become a “beacon for other democracies”. For Carney, this is about more than just closer trade relations. He emphasised that both partners should secure their strategic autonomy through intensive cooperation in key areas.

This applies, for example, to payment systems dominated by US corporations such as Visa and Mastercard, and to critical raw materials, where China plays a central role. Carney’s proposal: Canada and the EU should work together to develop their own alternatives. “We all have significant gaps in these strategic capabilities,” said Carney. This makes Canada and the EU vulnerable. These gaps cannot be closed alone, “but together, they certainly can”.

Greater cooperation on AI, technology, payment systems and energy

According to Carney and von der Leyen, the EU and Canada intend to cooperate more closely on industrial production, artificial intelligence (AI), semiconductors, critical raw materials, payment systems, vaccines, space communications and clean energy. Canada could, for example, make a major contribution to European energy security by supplying liquefied natural gas (LNG) and hydrogen on a large scale. New port facilities could be developed for this purpose. Canada, in turn, could benefit from Europe’s lead in clean energy technologies.

Carney also proposed exploring an integrated market for financial services and making it easier for young people to live, work and study in each other’s regions. This includes Canada’s intention to join the European student exchange programme Erasmus+.

Escalation of the US trade dispute accelerates Canada’s search for new partners

Canada is also being driven in this by the recent escalation of the trade dispute with the US. Following the collapse of trade talks between the US and Canada, the US imposed 50 per cent tariffs in August on Canadian goods worth around 20 billion US dollars (around 17 billion euros). These include items such as ice hockey sticks, furniture, honey and wine. Canada has responded with retaliatory tariffs on US imports. According to earlier reports, the measures affect products in the steel and aluminium sectors, household appliances, agricultural equipment, pulp and paper, and electronics. The tariffs are set to be as high as 50 per cent on imports from the United States worth 27.6 billion Canadian dollars (also around 17 billion euros).

This has recently been compounded by fresh political provocations from the US. In the week following the collapse of the trade talks, US President Trump issued an executive order renaming Lake Ontario, which is one of the five Great Lakes of North America and named after the Canadian province of the same name, to “Lake America”. Trump has repeatedly mocked Canada, a long-standing ally, and threatened to annex it as the 51st US state.

The US is currently by far Canada’s most important trading partner

Presently, Canada’ s most valuable trading partner is the US and by a wide margin. The economies of the two countries are closely intertwined. Around 70 per cent of all Canadian exports go to the United States. The neighbours are also closely linked in the energy sector. Bilateral energy trade reached around 216.8 billion Canadian dollars in 2024. Energy exports accounted for around 29 per cent of Canada’s goods exports to the US.

Carney now wants to break free from this dependence, at least in part, and diversify his country’s trade relations. The first signs of this shift are already visible: in 2025, Canada’s exports to the US fell by 3.7 per cent, whilst exports to other countries rose by 11.1 per cent. The share of non-US markets in Canadian exports thus rose to its highest level in more than four decades, according to Statistics Canada.

Ceta free trade agreement as an accelerator?

But Canada already has close ties with the EU as well. The CETA free trade agreement between the two economic blocs has been provisionally applied since 2017. Canada has also been participating in a key part of the EU’s Horizon Europe research programme since 2024. Furthermore, both sides concluded a comprehensive security and defence partnership in 2025. Since June this year, Canada has also been the first non-European country to participate in the EU’s SAFE defence instrument. This means that Canadian companies and products can be considered for joint procurement under simplified conditions.

EU-Canada summit at the end of October with key decisions?

The European Commission and Canada must now clarify how the political proposal can be turned into a concrete model. This involves defining the areas of cooperation, as well as Canada’s rights to have a say and its obligations. The question of the legal basis must also be clarified. The next EU–Canada summit on 29 and 30 October is likely to be an important first milestone. This will also raise the key question of what the 27 EU Member States make of von der Leyen’s initiative. A new special member status is unlikely to be adopted without unanimity. Several EU Member States have recently made it clear time and again that, for them, EU enlargement towards the Western Balkans or Ukraine is a priority.

 

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