EU chief floats associate membership for Canada after U.S. trade attacks
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Prime Minister Mark Carney arrives at the European Parliament in Strasbourg, France, as the EU proposes making Canada its first "associate member" on Sept. 16. Photo: Jean-Christophe Verhaegen/AFP via Getty Images
European Commission President Ursula von der Leyen on Wednesday proposed making Canada the European Union's first "associate member."
Why it matters: Canada and the EU are testing whether a nation deeply dependent on the U.S. market can find economic independence by moving closer to Europe.
- This could also present one of the most permanent effects of President Trump's trade wars: U.S. allies building markets, supply chains and security ties designed to make them less vulnerable to Washington.
- If the proposal goes through, the shift would pull Ottawa deeper into Europe's economic and security architecture as Canada reduces its reliance on the U.S. — something Canadian Prime Minister Mark Carney has signaled the nation is open to.
Driving the news: In her annual state of the union address, von der Leyen framed the Canada offer as part of Europe's response to a world where "old assumptions and relationships have frayed."
- Speaking directly to Carney, she said democracies "have the freedom to choose with whom to work."
- Her proposal would move beyond their existing trade pact to integrate their defense industries and deepen ties on manufacturing, technology, energy, and the Arctic.
- This comes after Trump has spent more than a year threatening Canada's economy and sovereignty, repeatedly calling for it to become the 51st state and imposing some of America's harshest tariffs.
- In addition to 50% tariffs, Trump will block certain Canadian dairy, alcohol and auto imports later this month.
What they're not saying: The White House, the European Commission and the Canadian prime minister's office have not yet responded to requests for comment.
Context: The EU already extends its single market without full membership to Norway, Iceland and Liechtenstein, but Canada's associate membership would likely differ.
- The single market guarantees the free movement of goods, services, capital and people, and it requires member states to accept Brussels' regulations.
- Canada already has a substantial free-trade deal with Europe that has eliminated tariffs on about 99% of goods, so the real question is whether associate membership will reach deeper into services, regulation, investment or coordination.
- Canadian exports to the U.S. dropped 5.8% last year while exports elsewhere jumped 17.2%, according to the Canadian government. But America still bought 71.7% of Canada's exports.
The big picture: Canada offers critical assets both the U.S. and Brussels need.
- It is the world's fourth-largest oil producer, providing more oil to the U.S. than every other foreign supplier combined.
- It ranked among the world's top five producers of 11 critical minerals last year, according to Natural Resources Canada.
- Nearly half the country reaches into the Arctic, giving it strategic reach as melting ice opens new routes, Russia builds up its military and China grows its presence.
- Canada also brings a ready-made defense industry. It is the first non-European country in the EU's SAFE defense procurement program, giving Canadian companies a leg up on providing defense contracts.
Between the lines: Canada is running an experiment other middle powers will watch: Can it replace its dependence on American markets?
- Trump has argued the trade war would revive American manufacturing. Yet manufacturing jobs have fallen since he took office last year, and Canada now buys less American goods, not more.
What we don't know: Carney and von der Leyen haven't laid out what an associate membership would entail, including whether Canada would gain access to the single market, which EU rules it would have to follow, or whether Canadians and Europeans would gain rights to live, work or study across the Atlantic.
What's next: Carney is expected to address the European Parliament on Thursday. Canada will then host the next Canada-EU summit in Montreal on Oct. 29-30.
