EU-Canada: Marriage of convenience or red rag to Trump?

Ursula von der Leyen's startling offer for Canada to become "the first associate member" of the EU during Wednesday’s State of the Union speech took many by surprise, not least the member states whose approval would be required for such an outcome.

"First we’d heard of it," remarked one EU diplomat. "It was a surprise," said a second diplomat, "but not a negative surprise."

The next day, Canada’s Prime Minister Mark Carney told the Strasbourg chamber that "Canada welcomes this ambition", although he did not himself refer to "associate" membership, and indeed later said his country had no ambitions to join the bloc.

As MEPs, member states and think-tanks scrambled to understand what was on offer. The European Commission’s deputy chief spokesperson Olof Gill told RTÉ’s Six One news: "All member states were consulted, all were aware."

Certainly, the increasingly warm relationship between Brussels and Ottawa has been at the forefront of the EU’s response to a myriad of geopolitical crises. Both sides held their 20th summit meeting in Brussels last year, and a follow-up summit takes place in Montreal at the end of October.

On September 9, European Commission officials and a team from the cabinet of European Council president Antonio Costa briefed 27 EU ambassadors on preparations for the Montreal summit.

Last Friday, President von der Leyen hosted the same ambassadors for lunch on the 13th floor of the Commission headquarters. On neither occasion, it’s understood, was "associate" membership mentioned.

The most obvious question was, what does it mean?

Article 217 of the Lisbon Treaty provides for the EU negotiating "...an association involving reciprocal rights and obligations" with non-EU countries or international organisations.

There is, to give one example, the EU-Israel Association Agreement, but that does not make Israel an associate member.

German Chancellor Friedrich Merz had suggested giving Ukraine associate membership as a sweetener while the country underwent the gruelling process of accession to full membership. That went down badly in both Kyiv and in EU capitals.

"'Associate member’ has no treaty basis," says Corain Stratulat of the European Policy Centre (EPC).

"‘The first’ implies a series. Canada is being offered, without an official request, the same label member states received coolly when Merz proposed it for Ukraine."

However, on the Six One News, Mr Gill was quick to clarify that "associate" membership was merely a "concept".

"We don't need to start talking about the precise legality at this point," he told Tommy Meskill.

"In a complicated geopolitical moment, in a time when there's great geopolitical uncertainty, the European Union and Canada have committed to forging closer ties together for the benefit of our peoples, to strengthen our economies, and to generally make the world a better place. That can only be a welcome thing."

Discussions on what the relationship might look like "in detail" would be part of the build up to Montreal.

"But we're talking here about a big bold idea, and I think it's something that's going to be warmly welcomed across the EU and indeed in Canada," he said.

Certainly, Ms Von der Leyen’s offer to Canada received prolonged applause from MEPs. But the "big bold idea" poses complex risks for both sides.

The EU-Canada relationship is already formalised by the Comprehensive Economic and Trade Agreement (CETA), concluded in 2014 and provisionally applied since 2017.

CETA reduced tariffs on 98% of goods and opened up both markets to services and public procurement, making the EU Canada’s second-biggest trading partner, with trade in goods reaching €75.6 billion in 2024, up from €46 billion in 2016.

Ten countries have yet to ratify CETA, including Ireland.

In the Irish case, the Supreme Court narrowly found in 2022 that the investor-state dispute settlement component of CETA, allowing investors to take action against a state via binding arbitration, would breach Article 34 of the Irish Constitution in that it infringed judicial sovereignty.

As a result, the Government is currently amending the 2010 Arbitration Act in order for the state to comply with CETA and other EU trade agreements which have similar investment dispute provisions (Chile, Mexico, Singapore and Vietnam).

The Government claims that full ratification "is still necessary to secure the full benefits" of CETA; other member states (Belgium, Bulgaria, Cyprus, France, Greece, Hungary, Italy, Poland, and Slovenia) have also yet to ratify.

In France, for example, the National Assembly endorsed CETA in 2019, but the Senate rejected it, sending it back to the lower chamber, where President Emmanuel Macron has lost his majority.

Given that CETA is opposed by the far-right Rassemblement Nationale (RN), with leader Marine Le Pen expected to win next year’s presidential election, it seems unlikely that France will be ratifying any time soon.

The world, of course, is very different to 2017, when CETA was first provisionally applied.

The central pitch of Ms Von der Leyen’s address was that Europe is reaching a tipping point on climate change, AI and the crippling trade deficit with China (€1 billion per day, according to officials), and is facing these tipping points in an increasingly hostile world.

The second Trump administration has inflicted costly tariff wars on both Canada and the EU, further destabilised the Middle East and undermined the global rules-based order. Russia’s war of aggression against Ukraine continues unabated while its hybrid war on European soil is escalating.

"Europe will always lead when it comes to defending the rules-based system," she told MEPs. "But we can no longer rely on it as the only way to secure our interests, or assume that its rules will shelter us from the complex threats that we face. In this new world, we must urgently reimagine our partnerships."

With both Canada and the EU reeling from President Donald Trump’s predatory designs on their territory, the partnership idea is essentially being accelerated - both sides believe leveraging their relative strengths is now no longer a luxury but a necessity.

The idea has not been pulled out of a hat.

Last year, both sides signed the EU-Canada Security and Defence Partnership, a sweeping arrangement which will allow Ottawa to participate in the EU’s €150 billion SAFE programme to boost defence procurement through low-interest loans, as well as deepening cooperation in cybersecurity, counterterrorism, violent extremism and hybrid threats.

There are plans for a Digital Trade Agreement that would allow Canada to participate in the EU’s AI gigafactories, linking high-performance computing infrastructure and deepening research cooperation in AI and quantum computing.

In his Strasbourg speech, Mr Carney reminded MEPs that Canada has deposits of over 34 critical minerals, "and we are among the top producers of the 10 most essential for the energy transition."

"Canada has not only raw materials itself," says a senior EU source, "but also the ability to refine them. Canada is a main producer of energy, so we have hard interest-based reasons to work together."

At the national level, Germany and Canada signed a strategic partnership in July covering security and defence, technology, AI, supply chains and critical minerals (similar agreements have been signed with France and Denmark).

But defence cooperation is an area that stands out.

"The EU stands to gain more from a closer relationship than one might think," says Anand Sundar, a special advisor to the European Council on Foreign Relations (ECFR).

"Canada is an underrated military power. The 2% of its GDP that it currently spends on defence is already more than the 14 smallest EU defence budgets combined. Compared to the EU’s biggest defence spenders, it ranks behind only Germany, France, Italy and Poland. And its budget is set to increase significantly as Canada moves to spend 4% by 2030 and C$500 billion (€310 billion) over the next decade."

Mr Carney has made it clear Canada’s investment in the US defence industry will decline as it increases in Europe.

German shipbuilder ThyssenKrupp Marine Systems is building 12 submarines for the Royal Canadian Navy, while Ottawa is planning to buy Swedish Gripen fighter jets instead of American F-35s. Canada’s heavy polar icebreaker is currently being constructed in Helsinki in partnership with Quebec’s Chantier Davie.

Yet, forging this closer union across the board without antagonising Donald Trump will be challenging to say the least.

In North Carolina on Thursday, the US president was quick to ridicule the idea of Canada’s associate membership as "laughable", before threatening to spike tariffs on EU goods (or stop trading altogether) if he decided this was a "hostile" act.

While the recent collapse in US-Canada trade negotiations has no doubt quickened Mr Carney’s step towards Europe, he has been courting the old continent for some time.

Even before his Davos speech in January, declaiming the need for "middle powers" to stick together in the face of Great Power threats, Mr Carney had been invited to attend Wednesday’s State of the Union address.

The Wall Street Journal has reported that the prime minister has been angling for "associate member" status for months, using the network built up from his days as head of the Bank of England to privately button-hole EU leaders at every turn.

He charged a new special envoy John Hannaford, a former Canadian cabinet secretary, to lead technical teams that would scope out how far the relationship could go short of membership.

While a number of EU leaders who are close to Mr Trump, such as Italy’s Giorgia Meloni, were wary about antagonising the US president, the crisis over Mr Trump’s threats to seize Greenland (Danish territory) and the Iran War, soon woke Europe up to the urgency of a potential partnership.

Meetings between Mr Carney and EU leaders intensified. After Davos in January, Mr Carney became the first non-European leader to attend the European Political Community (EPC) summit in Armenia in May (it may well be that he attends the next EPC in Dublin in November).

There were further close encounters at the G7 summit in Evian in June (followed by a bilateral meeting with President Macron in Paris), and at the NATO summit in Ankara in July.

Talk of a much deeper relationship was taking on a more tangible reality.

"The EU treaties are pretty clear in our minds," says the senior EU source, "but we can bring Canada as close as possible to the Union without it being a member state."

Yet, if the notoriously thin-skinned US president is looking for hostility, it won’t be hard to find; both the EU and Canada will struggle to articulate a convincing narrative that their Alliance for the Future is not a deliberate cold-shouldering of the United States.

As well as trade friction, both sides share a growing antipathy to the domination of US big tech firms.

"The symbolism and significance of this cannot be separated from the deteriorating state of US-Canada relations and Europe’s search for new international geometries to hedge against transatlantic uncertainty," says Dr Ian Lesser, distinguished fellow at the German Marshall Fund (GMF).

"With his Davos speech and more recent remarks, Carney has emerged as a leading critic of US policy and its consequences for the global order. He says what many European leaders would like to say but do not, and he says it as an establishment figure. His presence and the Canadian dimension were not afterthoughts. They were central to Von der Leyen’s message."

The historic nature of Wednesday’s overture by the Commission president, therefore, should not be overlooked.

Mr Carney appears serious in wanting to reorient the Canadian economy away from the US, to which it exported €396 billion in goods in 2025, to the European Union, where it exported €26.65 billion in 2024, according to Canadian trade figures.

That is why the precise legal nature of the Alliance for the Future is important.

Canada’s export economy is heavily calibrated to the US market, meaning its food safety standards tend to be US- and not EU-compliant (the Irish beef sector’s concerns that CETA would devastate their sector need not have worried - Canada’s beef exports to Europe are negligible because of the EU ban on growth hormones).

"The supply chain is deeply embedded in the US," says another EU diplomat.

We need a strongly integrated partnership, but what does that actually mean?

There is also domestic politics: Mr Carney, who’d been behind in the polls, became leader largely due to Mr Trump’s shocking hostility to his country. Canadian voters may privately think it better to wait out the Mr Trump presidency and let the storm blow over, rather than dramatically pivot across the Atlantic.

How close Canada could come towards the EU and its single market of 452 million people remains unanswerable for the time being.

"There is a certain predisposed opinion towards Canada [in Europe]," says Fabian Zuleeg, chief executive of the European Policy Centre (EPC), "this idea that maybe Canada could be an EU member has had, in some ways, quite a surprising resonance in many European countries.

"What it would look like is the more difficult part of this. Yes, we need a strongly integrated partnership, but what does that actually mean?"

Indeed, Mr Carney was careful not to explicitly pitch the new partnership in terms of greater single market access, even spelling out his desire to deepen trade in "non-agricultural goods and services".

Rather, it was a lyrical bid for European heart strings, referencing as he did the tale of the Canadian WWI lieutenant Leslie Miller who gathered acorns from the battlefield at Vimy Ridge in 1917 and went on to raise an oak forest in Ontario, grafts of which were ultimately returned to be planted in Vimy a century later.

He told MEPs: "Europe brings so many things: market power, research depth, advanced manufacturing, the ability and the will to set standards that the world frequently adopts, a defense industrial base that's being rebuilt at speed.

"Canada brings energy at huge scale and in every form that the transition requires. We have one of the world's largest endowments of critical minerals, deep capabilities in space, AI, and quantum, amongst the strongest banking systems and the most expert pension capital. We have unique Arctic geography and privileged access to both Atlantic and Pacific networks. And where our strengths differ, they complement. Where they overlap, they create scale."

Such poetry may not convince those EU politicians bracing themselves for a hard-right surge in next year’s elections (France, Italy, Poland, and Spain), perhaps another reason for the quickening process.

Explanations will be required too about how the EU, for years dismissive of suggestions about creative options short of full membership, has suddenly reached for a new, flexible model.

Together, Canada and the European Union can anchor our ground to hold our values while forming a protective canopy under which our citizens can thrive.

Ms Von der Leyen’s associate membership offer was seized on by pro- and anti-Brexit camps in the UK, as either a trap that the UK should not fall into, or a pathway back to full membership, not least because Britain’s post-Brexit trade deal with the EU is one which most resembles CETA.

"In principle, the new models of cooperation open to Canada, with its level of economic and political integration into the EU, are also up for grabs for the UK," says Joël Reland, senior research fellow at UK in a Changing Europe.

"[However], that model of membership is not likely to create a shortcut back into the single market. At least to begin with, the focus seems likely to be on looser cooperation and initiatives rather than a structured set of rights and obligations à la Norway or Switzerland."

This, says Mr Reland, may be something more to Andy Burnham’s liking than that of his predecessor Keir Starmer.

"None of this means UK associate membership is now there for the taking. While the UK might resemble Canada legally, it does not do so politically. Canada carries a lot less baggage. It did not initiate a dramatic divorce a decade ago, before starting to plead for special access to the single market from outside. If the UK wants a closer relationship it can seek to join the EU or the EEA - Canada, as a non-European state, cannot."

When asked if associate membership could be offered to the UK, Mr Gill said: "This is only a concept right now. What I can say for certain is that this concept, as we're developing it, is only going to apply to non-European countries. So, let's see what we can work with as regards Canada, and then we can deal with the rest in the future."

That suggests that this concept is a bold gamble for both sides.

Developing the sylvan metaphor, Mr Carney concluded: "Beneath the forest floor, the roots of an oak intertwine with those of its neighbors, exchanging nutrients, adding strength to strength, creating a resilient, self-sustaining ecosystem.

"Together, Canada and the European Union can anchor our ground to hold our values while forming a protective canopy under which our citizens can thrive."

He, and President von der Leyen, will no doubt hope those citizens are listening.