Canada Pivots To The EU In Response To More U.S. Trade Hostilities

Yesterday’s speech by Prime Minister Carney to the EU Parliament set the stage for Canada and the EU to seek a new arrangement, currently referred to as an “association”. While no such formal category exists per se, the thought that Canada would look to Europe for its future economic alliances has brought out the worst in President Trump. His response is that such an alliance would  constitute a “ hostile act”, resulting in his putting “serious tariffs or stop trading with Europe on many things”. PM Carney chose wisely to ignore these hollow threats, so often thrown out by a President losing his grip on international trade.

What exactly are Canada and the EU talking about?

Technically, there is  no formal definition or category called an "associate member"  amongst the various foundational treaties governing the European Union. Canada is geographically outside Europe and is not seeking full political integration, EU citizenship, or a vote in the European Parliament. 

Top of the list for both is the need to Integrate defense industrial bases, expand joint military procurement, and cooperate closely on Arctic security; Canadian sovereignty over its Arctic space along with Danish sovereignty over Greenland are crucial given the threats from Trump to make Canada the 51st state and to purchase Greenland.    Secondly, there is the possibility of jointly developing critical technology,  such as AI, compute facilities , cybersecurity and rare minerals. Lastly, one of the most desired shared goals is to allow both Canadian and EU citizens full mobility, visa-free,  rights to live, study and work in each jurisdiction. In other words, what is sought is a higher level political and economic arrangement than currently exists, such as CETA, a standard free-trade agreement.

In 1972, Prime Minister Pierre Trudeau introduced the Third Option involving the Canada-US bilateral relationship. Rejecting a status quo featuring a very significant reliance on the US market;  rejecting  further integration with the US;  he advocated a ‘third option” to pursue a comprehensive long-term strategy to reduce Canadian vulnerability to the U.S. by diversifying foreign trade. The third option never got off the ground. By the late 1980s Canada was negotiating with the US for a free-trade agreement, resulting in NAFTA signed in 1988, the forerunner of today’s continental free trade agreement, CUSMA.

Tons of bureaucratic work lies ahead for both Canada and the EU to flesh out what is really involved in association status. Neither side has any illusions of the work that lies ahead, although judging by the response to Carney’s speech, the EU Parliament is very open to a new arrangement. Trump,  true to his colors, just pushed Canada further away from his fantasy of making Canada a vassal state. It is dawning on all Canadians that the US, even post-Trump era, can no longer be considered a reliable business partner.