Canada would fall short of full single-market access
The European Union’s top official said Wednesday she wants the trading bloc to grant Canada associate membership, singling out Ottawa as part of a wider shift among U.S. allies to tighten and forge bonds between them, according to the Wall Street Journal.
The proposal faces significant legal and practical obstacles. The EU treaties provide no legal basis for associate membership of a country outside Europe, though they do allow for association agreements with allies such as Ukraine. Full EU membership for Canada is “almost certainly legally impossible,” the Journal reported.
Canadian officials have put their weight behind the idea in recent weeks in talks with the bloc. But what associate membership would mean in practice remains undefined. Canadian and European officials have stressed that the newly coined term for their relationship won’t amount to full membership of the trading bloc, the Journal reported.
Canada also wouldn’t get full, frictionless access to the single market. Three members of the European Economic Area (Norway, Iceland and Liechtenstein) have that privilege without being members of the EU, but they have to follow the bloc’s rules, pay into its budget, and accept freedom of movement of workers. Canada has said it isn’t prepared to agree to all those terms.
A quiet debate has been underway behind the scenes for a couple of years over whether the EU needs to be more flexible in how it structures its relations with like-minded nonmember states, including the U.K., Norway, and Canada, the Journal reported. German Chancellor Friedrich Merz suggested the idea for Ukraine earlier this year but was quickly rebuffed by Kyiv and other EU capitals that want to see Ukraine become a full member.
The two sides are pitching the relationship as cooperation on everything short of actual Canadian membership. That could entail a deeper trade agreement, consultation on regulation, and integration of some Canadian exporters into the EU supply chain. They are also discussing effective single-market access for Canadian businesses in cutting-edge sectors like artificial intelligence, defense, and the production of semiconductors or magnets, along with cooperation on research, cloud data projects, energy, space, and quantum computing.
Canadian officials have confirmed that there are discussions with European officials on Canada and the EU having some form of mutual free movement for workers in the future, the Journal reported.
Sovereignty tops the list of remaining tensions. Both Canada and the EU want to cooperate to bolster their ability to withstand interference from foreign powers, including the U.S., China, and Russia. Yet neither wants to surrender its ability to set its own laws at home. The tension has already roused some Canadian domestic opposition.
The EU wants assurance that Canada will remain in the arrangement for the long term and won’t be “talked out of the idea by Washington,” the Journal reported. The new arrangement could create friction with Canada’s trade agreements with the U.S. Ultimately, many of the decisions and investments that would deepen the relationship are in the hands of the private sector, which may question whether a geographically far-off partner can really become an economic bedrock.
One warning sign: while the EU-Canada trade deal has been in effect since 2017 and has significantly bolstered commerce, 10 EU member states still haven’t fully ratified it.
On the EU side, there will also need to be care that anything the bloc offers Canada isn’t a better deal than it gives to its own members or EEA partners, the Journal reported. Preferential treatment for Ottawa could erode the willingness of those countries to accept the obligations that come with access to the single market.
Some elements could move quickly. The two sides are homing in on a digital agreement, and Canada could relatively easily join Europe’s Erasmus education exchange program. But any truly transformational relationship will take years to construct and will depend on integrating some Canadian exporters into European supply chains. It may also require a more active security partnership alongside NATO.