Canada and the EU are moving closer together by leaps and bounds. But there is a limit

Brussels. Next week in Strasbourg, between Ursula von der Leyen’s State of the Union address and Mark Carney’s speech to the European Parliament, the European Union and Canada could embark on an unprecedented process of rapprochement. The Canadian Prime Minister made this very clear following the breakdown of tariff negotiations with the United States, which triggered a trade escalation with Donald Trump. “This autumn we will begin intensive discussions with the EU, the world’s second-largest economy, to build a much stronger and deeper economic and security partnership,” the Canadian Prime Minister had said immediately after the breakdown of negotiations on 21 August. According to Bloomberg, in her State of the Union address (to which Carney has been invited as a guest of honour), von der Leyen will announce the launch of talks to build a new alliance with Canada covering all sectors. An EU-Canada summit will be held on 29 and 30 October in Montréal. Preparations are underway. The ambassadors of the 27 member states held discussions yesterday. The summit is seen as “an opportunity to further strengthen the relationship”, an EU diplomat explained to Il Foglio. Trade, supply chains, critical raw materials, oil and gas, defence and security, space and scientific research: the aim is to bring the EU and Canada as close together as possible. Canadian officials speak of ties that are as extensive as possible, right up to the limit of EU membership, which is legally impossible. All options are on the table: rewriting the CETA agreement, negotiating a new treaty or creating new forms of cooperation.

Europeans listened with admiration to Carney’s speech at the World Economic Forum in Davos in January, when the Canadian Prime Minister declared the old rules-based world order to be over and called for the formation of an alliance of middle powers to counter the hegemonic ambitions of the United States, China and Russia. Some Europeans also looked on with a touch of envy at the Canadian Prime Minister when he decided to stand up to Trump in the tariff negotiations. Carney chose not to yield to economic pressure from the American President, accepting the costs of a trade escalation that he is convinced he can win. Canada is the weaker party. But American businesses may soon start putting pressure on Trump to make a ‘Taco’, given how integrated their supply chains are with Canada. Carney’s decision is the exact opposite of what Ursula von der Leyen and the European leaders did in July 2025 when, at the Turnberry golf resort, they agreed to strike a tariff deal with Trump that was detrimental to the EU. The U.S. president had threatened much higher tariffs. The Europeans did not have the courage to accept the risk of short-term pain for the sake of long-term gain. Now some European companies are investing in the United States to relocate production, well aware that they will be able to export to the EU tariff-free.

The contrasting strategies of the EU and Canada regarding Trump’s tariffs illustrate the limitations of a rapprochement that both sides desire, but which remains difficult to achieve. There are other limitations, imposed by politics. Since 2017, Canada and the EU have already had a free trade agreement, CETA, which has brought benefits to businesses and farmers on both sides of the Atlantic. However, only the trade section is provisionally in force. The ratification of CETA – and thus the implementation of the sections on investment and market access – is stalled in several EU member states due to domestic political resistance. Last June, Canada signed a Security and Defence Partnership Agreement with the EU, which allows Canadian businesses to bid for contracts under the rearmament programme financed by SAFE loans. However, Canada’s contribution is effectively limited to certain raw materials critical to the European defence industry. Some of the proposals put forward in recent months by the Commission to introduce the ‘Made in Europe’ principle and favour European companies – such as the Industrial Accelerator Act or the new rules on public procurement – could lead to the exclusion of Canadian companies. It will take more than a couple of speeches in Strasbourg to build the EU-Canada pact.