Von der Leyen’s proposal to Canada fizzles out. Carney’s plan is on the table

Brussels. Ursula von der Leyen’s “grand, bold, marvellous” idea of making Canada the European Union’s first associate member will not happen in the immediate future, nor even in the near future. Just over a month after her State of the Union address, when she offered Mark Carney the prospect of associate membership of the EU, the Commission President is facing opposition from several Member States, including Germany and France. Even the Canadian Prime Minister has not reacted enthusiastically to the proposal. At the EU–Canada summit to be held in Montreal next week, von der Leyen and Carney will therefore focus on the other project, the one backed by the Canadian Prime Minister: the Alliance for the Future. The problem with associate membership is not the content. It is the lack of content.

As is often the case with her, von der Leyen has made a spectacular announcement without backing it up with substance. The Commission President has made the headlines, but has left her direct interlocutors wondering. “We don’t know what ‘associated membership’ is,” a European diplomat explains to Il Foglio. “Some Member States don’t like the phrase. Others want clarity on what it actually means,” says the diplomat. The Commission has insisted that the concept be included, at the very least, in the joint declaration of the EU–Canada summit on 29 and 30 October. A couple of sentences to state that the concept of “associated membership” will be developed by the next summit next year and is set to become a long-term project. But following discussions with the member states and Canada, von der Leyen’s “big, bold and wonderful idea” – as one of her spokespeople had described it – is hanging in the balance. Mark Carney’s vision of the “Alliance for the Future” has won over the Europeans far more than the concept of associate membership.

Terminology aside, the EU expects “very strong” results from the Montreal summit, explains the diplomat. The Alliance for the Future is expected to formalise economic, technological and strategic cooperation between the EU and Canada to tackle geopolitical and geo-economic challenges as equals. To complement CETA – the free trade agreement concluded in 2016 but not yet ratified by all EU Member States – Carney and von der Leyen are expected to announce a digital trade agreement, a second-generation competition agreement and an agreement to allow the European Investment Bank to invest in critical Canadian raw materials. The joint statement is expected to include initiatives on cybersecurity, artificial intelligence, cloud computing, supply chain resilience, the security of critical infrastructure and critical raw materials. The EU and Canada are also expected to commit to facilitating the activities of businesses and investors on both sides of the Atlantic, by further integrating financial markets and linking next-generation payment systems. Negotiations will begin on Canada’s participation in the EU’s Erasmus student exchange programme and on promoting labour mobility (particularly for young people and highly skilled workers).

Von der Leyen and Carney are also expected to announce the resolution of certain trade frictions (barriers to free trade introduced through regulation). One example is the application of the carbon tax at the EU’s borders, the CBAM, which imposes an additional cost on Canadian industry despite similar emissions regulations. Another example is the various ‘Made in the EU’ clauses that Europeans are introducing to favour their own industry. The Commission would like to use concessions on trade frictions with Canada as a model to encourage other partners – such as the UK – to follow suit and soften their red lines in relations with the EU. But this is not straightforward due to resistance from some EU Member States. The draft declaration from the Montreal summit includes a commitment to jointly purchase dozens of Canadair aircraft to fight wildfires. But within the EU, there are those who argue that the aircraft, purchased with EU funds, should contain at least a certain percentage of European components.