Seeking new ways forward

Ever since European Commission President Ursula von der Leyen suggested on Sept 16 that Canada considers becoming an "associate member" of the European Union, the two sides have worked rapidly to explore the possibility.

Canada's Prime Minister Mark Carney welcomed the idea the following day, with both sides seemingly pushed together by the fact that they must diversify their partnerships because they can no longer fully rely on their traditional ally, the United States.

On Oct 1, Canada and the European Commission held a new round of Digital Dialogue, with discussions including AI safety, regulation, and innovation.

Meeting on the sidelines of the G20 Trade Ministers' Meeting in Milwaukee, Wisconsin, US from Sept 30 to Oct 1, Canada's Minister of International Trade Maninder Sidhu and EU Trade Commissioner Maros Sefcovic discussed deepening economic cooperation, with Sidhu highlighting critical minerals, defense, and digital trade as areas where Canada wants more collaboration with the EU.

The two sides have already built close economic ties through the Comprehensive Economic and Trade Agreement, or CETA, which has been provisionally applied since 2017.

Bilateral trade in goods and services reached 130 billion euros ($145.5 billion) in 2025, up 80 percent from 2016.

A draft joint statement for the upcoming Canada-EU summit published by The Globe and Mail said the two sides planned to connect next-generation payment systems to enable faster, lower-cost cross-border transactions, while deepening cooperation in areas including critical minerals, digital trade, defense, and space.

It added that the new partnership will be called an "Alliance for the Future".

The developments echo von der Leyen's words in her State of the Union address, when she said: "We share one ocean, one set of values, one way of seeing the world."

Carney struck a similar note in his address to the European Parliament the following day, saying: "An alliance for the future is a unique, positive approach that we will define together, building on our common strengths and based on shared values."

The idea builds on years of deepening ties under CETA and gained momentum after the two sides established a Security and Defense Partnership in 2025.

Achim Wambach, president of the ZEW-Leibniz Center for European Economic Research, said the alliance could become a blueprint for deep partnerships to secure vital resources and technologies.

The Future of European Competitiveness report said that 70 percent of the European cloud and AI market is dominated by US hyperscalers.

"The proposed closer partnership with Canada reflects the EU's broader 'de-risking' strategy to strengthen its strategic autonomy by reducing critical dependencies," Wambach said.

The European Council's official page on EU-US relations notes that in 2025 the EU imported more than 82.9 billion cubic meters of liquefied natural gas from the US, equivalent to 26.4 percent of total EU gas imports and almost 58 percent of its LNG imports. In comparison, Canada provided 5,384 metric tons of natural uranium to EU utilities in 2025, accounting for 36.7 percent of total deliveries and making Canada the bloc's largest single source.

Wambach pointed out that the EU's Critical Raw Materials framework, which includes partnerships with 16 countries, opens the door to more diversification.

"Going beyond raw materials, the EU has potential to deepen partnerships with the Gulf region for energy and hydrogen, and India, Japan, and South Korea for advanced technologies and manufacturing," he said.

Yan Xiaoxiao, an associate researcher at the Institute of International Relations at the Shanghai Academy of Social Sciences, said a key factor pushing both the EU and Canada to diversify their partnerships is unstable policy from the US.

"Canada has been hit by tariffs across sectors including steel, aluminum, autos, and a range of manufactured goods, while the EU agreed with Washington in 2025 to a 15 percent tariff ceiling on most of its exports," he said. "To diversify is important, practical, and beneficial for both sides."

Huang Jing, a professor on American studies at Shanghai International Studies University, said the EU-Canada move was not the result of a long period of deliberation backed by corresponding policy and institutional preparations, but an improvised response to immediate pressures.

"Whether it can develop into a deeper relationship depends not only on the domestic political constraints on both sides, but also on external factors, primarily the US," he said.

Fabian Zuleeg, chief executive and chief economist of the Brussels-based European Policy Centre, said the added value of the proposed relationship would have to come from integration, rather than simply more cooperation.

"CETA provides a strong trade framework, but an integrated partnership could go much further: closer integration of markets, finance, and supply chains, alongside economic security, defense procurement, technology, and critical raw materials. But deeper integration must come with obligations as well as benefits, including forms of alignment and sovereignty sharing," Zuleeg said.

How far will the diversification go?

Radhika Desai, a professor of political studies at the University of Manitoba in Canada, questioned how far such diversification can go, pointing both to Canada's heavy economic reliance on the US and to the institutional hurdles involved in closer integration with the EU.

"Canada is so reliant on the United States that it's not going to lead to anything dramatically different," she said, adding that any much closer relationship with the EU would ultimately have to accommodate the interests of its 27 member states. She cited CETA as an example, saying 10 years after it was signed, the agreement is yet to secure ratification from 10 EU countries.

Ryan Williams, a former member of Canada's House of Commons, said: "Europe already sells considerably more to Canada than Canada sells to Europe. Are we getting a new political relationship while Europe gets greater access to Canadian resources, defense contracts, investment opportunities, and potentially our market? Those aren't arguments against Europe. They're questions that should be answered before we create a category of EU relationship that has never existed before."

According to a September report by independent advisory company Oxford Economics, total trade in goods and services between the EU and Canada has nearly doubled in value during the past three decades, partly thanks to CETA. However, that growth has been driven largely by Canadian imports from the EU, which has widened Canada's trade deficit with the bloc. The report also noted Canada's trade with the EU is roughly one-seventh of its trade with the US.

Zuleeg said the arrangement could also have relevance beyond Canada, although not as a one-size-fits-all model.

"It could provide a framework for deeper integration with like-minded partners such as the UK, Norway, Japan, or South Korea, potentially complemented by a broader Economic Security Alliance. The central challenge is institutional: how to enable meaningful participation without EU membership, while protecting EU decision-making and ensuring that partners remain genuinely like-minded. It should be flexible, differentiated, and capable of dealing with political divergence over time," he said.

Desai argued that Canada should look beyond its traditional Western partners if diversification is its objective.

"If you really wanted to diversify your trade relations, you would deepen your relations with China," she said. "Because practically everything that the United States has to offer, you can get from China. Practically everything you have been exporting to the United States, you can sell to China."

Canada and the EU are expected to take the discussions further when Canada hosts their next summit in Montreal on Oct 29 and 30.

Contact the writers at zhangzhouxiang@chinadaily.com.cn.