MONTREAL, Canada — The European Union and Canada have agreed to build the closest possible relationship. Over the next six months, they will have to define what that means — and whether Canada can become the EU’s first, and perhaps only, associate member.

A summit in Montreal last week highlighted the urgency behind the budding relationship. Both sides say their partnership is positive and not directed against any country. But it is also driven by mutual need: to shore up supply chains, pool expertise and reduce reliance on the United States and China.

Mark Carney told POLITICO in an interview straight after the summit that the two sides should not be tailoring their partnership to cope with the potential reactions of other powers. “We’re not adjusting [based on] what the U.S. might think, what China might think, what … Russia might think,” he said. The goal, the Canadian prime minister explained, is to help both sides “withstand shocks” and prevent rivals from exploiting critical dependencies.

The test of that plan comes in six months, when the European Commission will meet with the Canadian government to see what progress has been made. One diplomat involved in the talks, granted anonymity to speak freely, said the meeting, which will be held in March before next year’s EU-Canada summit in Brussels, should make clear how far the relationship can develop and whether Ottawa is really on track for associate membership.

In the months ahead, there will be plenty of issues that could distract EU leaders. Governments must negotiate the bloc’s next seven-year budget, amid deep divisions over its size and spending priorities. Plus, a series of elections in some of the EU’s biggest countries, including Spain, France, Italy and Poland, will make concentrating on Canada a tall order.

Deal first, definition later

The joint declaration signed in Montreal commits both sides to defining the concept of “associate membership” by their 2027 summit. In the meantime, they have a slate of agreements and work plans to put into practice.

That includes a digital trade agreement and a competition deal signed in Montreal, plus Canada’s participation in the EU’s high-performance computing partnership. They also agreed on a new framework for cooperation between EU border force Frontex and the Canada Border Services Agency. Ottawa said it intends to join the EU’s Ukraine Support Loan facility.

The declaration sets out further work on critical raw materials and energy, including a feasibility study into long-term liquefied natural gas exports to Europe and exploring ways to jointly stockpile strategic resources. It also calls for cooperation on subsea cables, artificial intelligence and research, closer financial links, Arctic security, and disaster response. Canada and the EU will begin talks on deeper Canadian participation in Erasmus+, the EU’s education and youth program.

The summit also saw the launch of the Alliance for the Future, a broader partnership plan that could eventually include Japan, South Korea and Australia. It aims to build resilient supply chains and coordinate on economic security, so partner nations do not inadvertently harm one another with trade measures as they respond to Chinese overcapacity and U.S. tariffs.

But that could be easier said than done, with both Europe and Canada keen to avoid breaching World Trade Organization rules with their arrangements.

That concern is already visible in the debate over “Buy Canadian” and the EU’s proposed “Made in Europe” rules, both of which seek to favor homegrown suppliers. Commission President Ursula von der Leyen said in Montreal that Brussels intends to ensure Canada is not disadvantaged by the EU’s Industrial Accelerator Act — proposed legislation encouraging European businesses to go greener through subsidies and payment schemes. The ball is now in Carney’s court to offer similar assurances to European businesses under Buy Canadian.

Semantics breakdown

The summit’s biggest political snag came down to two words.

Von der Leyen opened the door to Canada becoming the EU’s first “associate member” in her State of the Union speech in September. But Germany blocked the term from being included in the joint declaration, saying the concept is vague and undefined. Other EU capitals said they also wanted to know what the arrangement would entail before fully committing to it.

The wrangle over the label overshadowed the substance of the summit and visibly frustrated both Carney and the European contingent. Asked about Germany’s objections, Carney told POLITICO it was “a very internal European issue.”

The dispute highlights Ottawa’s challenge: even if the Canadian government and the Commission agree on a plan, any formal arrangement must navigate 27 EU governments with their own concerns, pet industries and foibles.

The real reason for Berlin’s opposition remains unclear, with one EU diplomat describing the kerfuffle as an “embarrassment.”

One theory among senior EU officials and diplomats is that Germany was smarting because it wanted the term to be used for Ukraine earlier this year — only for other EU countries and Ukrainian President Volodymyr Zelenskyy himself to reject the idea.

The Le Pen test

The EU-Canada partnership is meant to rest on shared, centrist values. But what happens if political shifts in the EU’s two largest countries change what underpins the friendship?

The French presidential election in April could bring Marine Le Pen to power, while the Alternative for Germany has made gains in successive regional elections.

Carney told POLITICO he would work with whichever leaders voters choose, while drawing a line between cooperation and agreement. “My responsibility is to work with, whether it’s provincial premiers or leaders of other countries, in the best interest of Canada,” he said. But he added that “working with and having agreement on are two different things.”

Carney said democratic outcomes could change Europe’s priorities, but argued that cooperation could still deepen.

The six-month stocktake will show whether that confidence holds.

MONTREAL — There’s one thing the European Union and Canada want to avoid with their new alliance: stoking new fury from Washington and Beijing.

Officials have been under pressure to check off everything they said they would do at the last summit and on Friday will unveil the areas they plan to focus on over the next year, as they intensify their transatlantic cooperation. But don’t expect a parade of new deals.

“Canada has objectives where they need our technology — so you can build a beautiful relationship if you focus on it,” one senior EU official told POLITICO about shared challenges in diversifying away from the U.S. and China. The official was granted anonymity to speak candidly about sensitive diplomatic negotiations between Brussels and Ottawa.

One of the core EU interests in Canada, the official explained, is a chance for the bloc to diversify its supply of critical raw materials and sources of energy to further reduce its dependence on China and Russia, respectively.

“They have most of what we need,” the official said about Canadian minerals. “There’s also a huge opportunity to bring Canadian fossil fuels and gas to the EU.”

Prime Minister Mark Carney dismissed the controversy over whether the EU should label the relationship with Canada as an “associate membership,” saying on Thursday it was a sideshow to what’s been billed as a landmark summit.

Earlier this week, Germany, France, Greece and other countries opposed the definition in a joint EU-Canada statement to be issued in Montreal. That came after European Commission President Ursula von der Leyen put forward the “associate membership” label in September. 

But Carney told reporters on Thursday that the new alliance wasn’t “a marketing exercise” and that the name doesn’t matter. “What matters is that the complementarities of our two jurisdictions strengthen our sovereignty, strengthen Europe’s sovereignty, various strategic autonomies, critical minerals, energy, other aspects — AI,” he said.

A tricky political road lies ahead as Carney and von der Leyen make moves to draw the EU and Canada closer in a partnership that doesn’t include its southern neighbor. They’ll need to tiptoe forward with an “association without accession” work plan in the last years of the U.S. President Donald Trump’s time in office. 

Diplomatic balance

Montreal’s historic Fairmont The Queen Elizabeth hotel was a hub of summit activity on Thursday, beginning with a morning spectacle of von der Leyen heading out of the hotel in runners, taking staff out for a walking meeting. EU commissioners and Canadian Cabinet ministers sailed in and out of the hotel’s perfumed lobby, greeting colleagues. 

Jet-lagged Europeans, along with Canadian officials and lobbyists, commiserated over what they saw as poor summit organization, spread across multiple locations.

The debate over membership semantics became a luncheon laugh line when European Council President António Costa endorsed Von der Leyen’s offer to Canada before joking the final designation is “subject to revision”

Then, between servings of frisée salad and roast salmon, Costa struck a diplomatic balance.

“Tomorrow, the European Union and Canada will launch an alliance for the future of Europe,” he said, invoking German Chancellor Friedrich Merz’s preferred label and a term Carney has also used to describe the relationship. But Costa also backed von der Leyen’s “ambition” of Canada as an “associate member” of the EU, admitting the term might not matter in the end.

By mid-afternoon, Carney seemed to come around to the term, recognizing the work underway to deepen relations as “an alliance for the future, with Canada as an associate member, between Canada and the European Union.”

The two sides are expected to announce a wrap on talks on a new digital trade agreement on Friday, ending negotiations that were launched in the spring. Other anticipated outcomes include an agreement between the European Investment Bank and Canada, geared to allow the bloc to fund Canadian critical minerals projects. 

Eleven EU commissioners in town to “further an agenda” is no small accomplishment, Canadian Finance Minister François-Philippe Champagne told reporters. “It’s a historic moment that we need to seize.”

AI and energy companies are expected to be major beneficiaries of an enhanced EU–Canada relationship, making the absences of European Energy Commissioner Dan Jørgensen and Canadian Energy and Natural Resources Minister Tim Hodgson noteworthy.

Zoya Sheftalovich contributed to this report from Montreal.

The EU and Canada are betting they can deepen their partnership while Donald Trump looks inward at the U.S. midterms — and before European elections upend the political calculus.

Their strategy is to push for the broadest possible upgrade and hope Trump is too busy campaigning to respond, four EU officials and two Canadian diplomats familiar with preparations for this week’s summit in Montreal said.

Trump, whose Republican Party is fighting to retain control of Congress in next week’s midterms, has called the EU’s offer of associate membership for Canada “laughable” and threatened “serious tariffs” if the two sides get too close.

European Commission President Ursula von der Leyen and European Council President António Costa will join Canadian Prime Minister Mark Carney for two days of talks on trade, security, energy, education and the Arctic on Thursday.

The summit “is a very strong statement,” said Mark Camilleri, president of the Canada and EU Trade and Investment Association. “I don’t think there’s any feeling that this is going to be some discreet get-together.”

Canada is also looking to move before Europe’s politics shift. Ottawa wants changes to the partnership that will outlast Trump and Marine Le Pen, whose National Rally is polling ahead in France and has criticized the EU-Canada trade pact, CETA, said a Canadian diplomat. All the officials and diplomats in this article were granted anonymity to speak frankly about the summit preparations.

Avoiding Trump’s ire

Brussels and Ottawa are pushing to strengthen their relationship, including by cooperating more closely on trade and defense, international engagement and institutional links, according to a draft joint statement obtained by POLITICO.

In her September State of the Union speech, von der Leyen emphasized that the EU-Canada alliance is “not against anyone else.” Yet officials acknowledge that a stronger alliance risks triggering retaliation from Trump.

Von der Leyen, Costa and Carney “are fully aware that the eyes of the world are upon them,” said Camilleri.

The Europeans and Canadians know “the U.S. is watching,” a senior EU official said, adding that the bloc and Canada were nevertheless proceeding with business as usual and pushing for the most expansive possible relationship with Ottawa.

Another possibility is that the summit yields only “nice pictures” and little substance, a third senior official said, making it less likely to “trigger” the president.

European capitals, EU institutions and Canada’s provinces are all waiting to see what von der Leyen and Carney agree on in their meeting, the Canadian diplomat said, adding it was impossible to pre-judge how Trump would react.

Shadow of Le Pen

For Ottawa, pressure comes from another direction: Europe’s electoral calendar and the rise of the far right.

With Spain, France, Poland and Italy all set to go to the polls in the next year, Canadian officials want to secure concrete gains while EU governments remain receptive to closer cooperation and keep the topic front of mind, before elections across the bloc risk shifting priorities and upsetting the political balance.

When Carney came to Strasbourg to lay out his vision for a closer alliance in September, he was heckled from the gallery by the far-right Alternative for Germany MEP Siegbert Droese, who led chants of “USA!”

But it’s France’s presidential election in April — and the prospect of Le Pen in office — that is causing the most concern, according to a second Canadian diplomat.

“It’s very fortunate we’re doing this summit now and not in six months,” the diplomat said, referring to the French election date.

Canada is pushing for big, bold “structural changes” in its relationship with the EU now that will outlast Trump and Le Pen, the diplomat added. Carney has grasped the moment’s rarity and urgency and will not leave the summit without securing major wins, the first Canadian diplomat said.

Another question is whether Brussels and Ottawa can upgrade their partnership without eventually drawing the U.S. president’s ire. The midterms might buy them some time, but the vote will not keep Trump busy forever.

Trump might be even more dangerous and more likely to take out his anger on the EU and Canada after the election, given that he will retain many of his tariff and foreign policy powers even if the Republicans lose Congress, the second Canadian diplomat warned.

“At the end of the day, his reaction could be anything,” Camilleri said. “We can only control what we can control.”

Mathieu Pollet contributed reporting.

The U.S. and Canada are flirting again.

Washington and Ottawa have increased the tempo of their trade talks over the past week, after President Donald Trump and Prime Minister Mark Carney spoke by phone on Oct. 21.

Commerce Secretary Howard Lutnick, who helped torpedo a previous round of negotiations over the summer, and Canadian Trade Minister Dominic LeBlanc have been speaking regularly since then, according to two people with knowledge of the talks, granted anonymity because they were not authorized to speak publicly. They have primarily discussed Trump’s tariffs on sectors like autos and steel that have been a sticking point for Canada all along.

A senior Canadian government official told POLITICO that talks remain informal as of Tuesday.

The uptick in engagement — what Carney called “un petit intensification” speaking in French to reporters in Ottawa Monday — has triggered a flurry of headlines on both sides of the border as well as White House boasts that a deal is near. The North American trade spat will be “settled pretty soon,” Trump predicted at a rally Sunday in Michigan.

But unlike Trump, Carney has little political incentive to make concessions at the moment — or bail out Trump right before congressional elections heavily focused on affordability, including tariffs’ impact on prices. The Canadian prime minister is riding high in domestic polls after standing up to the American president and walking away from trade negotiations in August. And he is days away from welcoming European Union leaders to Montreal for a landmark summit aimed at deepening their alliance — and building an implicit counterweight to the U.S.

Neither side, moreover, has dropped its original demands, according to half a dozen current and former government officials, industry representatives and others with knowledge of the talks. Those outstanding sticking points include Carney’s ask for lower auto tariffs and Trump’s push for increased access to the Canadian alcohol and dairy markets.

The lack of new concessions or tangible breakthroughs is a sign that the recent flurry of outreach may be more of a White House effort to soothe Republicans’ midterm worries — particularly in border states whose economies are tightly connected to Canada’s — than to secure an immediate deal. The people say any denouement between the two countries is likely weeks if not months off, even as they expect the two North American neighbors to ultimately hammer out an agreement to lower tariffs and stabilize one of the world’s largest trading relationships.

“I think that we’re going to make a deal with Canada. I mean, first of all, we made a deal with Canada. They reneged on the deal,” Sen. Bernie Moreno (R-Ohio) said in an interview. Asked if the deal will come before the election, Moreno said, “I don’t know.”

Canada has also been cautious about promising that a deal is near. Carney said last week Ottawa doesn’t care about “the timing” of an agreement to roll back tariffs on each other’s imports. And both Mark Wiseman, the Canadian Ambassador to the U.S., and Pete Hoekstra, the U.S. Ambassador to Canada, suggested at an event in Ottawa Monday that there will be a deal, even if it takes time.

“We have to take a longer timeline into account. And at the end of the day, we have to remember neither of us is moving out of the neighborhood, and we’re going to make it work,” Wiseman said. “The state of the relationship is pretty damn good.”

Trump, however, has been lobbing attacks on Ottawa since he returned to the White House, calling Canada the 51st state and threatening tariffs since shortly after his reelection win. Canada, along with Mexico and China, was one of the first countries he targeted with new duties in 2025 — despite an existing North American free trade deal and deeply entwined economies, particularly in the auto industry.

The tensions hit a crescendo this summer, when Trump announced a preliminary deal with Carney to lower U.S. duties, among other measures, before talks collapsed at the 11th hour. Washington and Ottawa then traded 50% duties on about $20 billion worth of goods, with Trump imposing a ban on certain products, like alcohol, and threatening even more punitive duties come January if their differences have not been resolved.

The forces that caused the deal to unravel in August are still in place. Canada has continued to seek lower tariff rates for key sectors, including autos, trucks, steel and aluminum — policies that are under Lutnick’s purview at the Commerce Department. The previous talks hit a snag over whether the U.S. would lower tariffs on heavy duty trucks, some of which are built in Ontario.

“Any potential Canada deal is going to have the same issue,” said an industry official granted anonymity to discuss private conversations. “And that is Lutnick’s strong reluctance to negotiate on the [sector-specific tariffs], particularly now that he is much heavier involved.”

Lutnick “has signed off on auto [tariff] reductions,” in previous trade agreements the White House reached with partners like the European Union and Japan, “but those often come with promises of large investment.”

A White House official confirmed Lutnick and U.S. Trade Representative Jamieson Greer have held discussions with their Canadian counterparts in recent days.

“USTR and the Commerce Department continue to work together on the cross-cutting issues involving trade with Canada,” added the official, who was granted anonymity to share details about the negotiations.

The Commerce Department and the Office of the U.S. Trade Representative did not respond to requests for comment.

Industry groups that are in favor of keeping the existing duties on Canadian steel, aluminum and autos insist that Lutnick remains in their corner, even as talks intensify. Representatives for domestic manufacturing met with senior officials at the Commerce Department and USTR over the past week to lobby in favor of sticking with the status quo, according to two people granted anonymity to describe the private discussions.

“”The programs are effective as they are, and they should stay as they are,” said Century Aluminum President and CEO Jesse Gary, adding that Lutnick shows a “clear understanding of what makes these types of industries work.”

The Canada tariffs are unpopular among U.S. voters, however, and have been a headache for Republican candidates running in U.S. border states. Sen. Susan Collins of Maine, GOP Senate candidate Mike Rogers of Michigan and Republican Senate hopeful John Sununu of New Hampshire have all come out against the deal. The topic has even trickled into competitive races in Texas and Kansas.

Adam Hamilton, the Democrat challenging Sen. Roger Marshall in Kansas, is making tariffs part of his closing argument in a state where the agriculture industry has been pummeled by the trade war.

Trump and his National Economic Council Director Kevin Hassett have sought to play down Republicans’ concerns about the duties by suggesting a deal is close.

Speaking to Fox News on Sunday, Hassett said that the two sides are “very close” to a deal and emphasized Lutnick’s involvement in talks.

“I expect this is supposed to send some sort of signal to … Iowa and Kansas and other states,” said a person close to the administration who was granted anonymity to share details of private conversations with officials. But “no one expects a deal,” the person said.

“Carney would have to have some reason to want to get a deal before the midterms,” the person added. “But I can’t imagine why he would at this point.”

Megan Messerly, Sue Allan, Zi-Ann Lum and Nick Taylor-Vaisey contributed reporting.

Mark Carney’s pursuit of a global alliance of middle powers has a Europe problem.

Canada’s prime minister wants to help build a new world order that can counterbalance the power of the United States and China. But his vision depends on a new relationship with a Europe that doesn’t see itself as a middle power at all. 

European Commission President Ursula von der Leyen has a different vision: a Brussels-centered bloc that extends the EU’s economic and geopolitical influence, starting with Canada. The idea, according to senior European lawmaker Siegfried Mureșan, is to create an opportunity for the EU to become the “global center of gravity for liberal democracies.” 

The competing visions will be tested this week when Carney and von der Leyen meet in Montreal for a summit intended to chart a new course for transatlantic relations. Both want to demonstrate they can prosper in a world upended by U.S. President Donald Trump. But they have different ideas about their curious new alliance — and face political resistance that could limit how far the partnership can go. 

Von der Leyen’s offer of “associate membership” in the EU surprised officials on both sides of the Atlantic. Four diplomats told POLITICO they were not consulted before she floated the idea in the State of the Union. The officials added that they don’t understand the label, which has yet to be defined. Germany has since led pushback on the plan.

“We’ve definitely put the cart before the horse,” one of the diplomats said. “We’re announcing something and then figuring out how to flesh it out.”

Trump called the membership idea “laughable,” but also threatened “very serious tariffs” should it come to be — a reminder that leaders in pursuit of Washington workarounds must avoid provoking the White House. 

The leaders are under pressure to leave Montreal with more than a liberal democratic photo-op. For starters, they need to decide what “associate membership” means — and disarm resistance in the EU capitals blindsided by von der Leyen’s plan.

Canada’s Ambassador to the EU Jonathan Wilkinson told POLITICO last month that people got too hung up on a label that was revealed prematurely. Carney called the Canada-EU relationship an “alliance for the future” when he addressed European lawmakers in Strasbourg.

Wilkinson said the Canada-EU project will show other democratic nations how to deepen partnerships. “It ties into very much what [Carney] talked about at Davos — and after Davos.”

Carney, von der Leyen and European Council President António Costa have two days to chart what’s next while American foreign policy continues to stress test geopolitical relationships in midterm campaigns that will shape Trump’s last two years in office.

The economic divide 

Ottawa considers the EU an obvious partner in its push to diversify trade away from the U.S. There’s already a free-trade agreement that both sides view as being underutilized. 

Leaders gathering in Montreal this week will celebrate the 10th anniversary of the Canadian-EU trade agreement, nicknamed CETA. But nine EU member countries have yet to ratify the deal, underscoring the challenge of turning rhetoric into reality. 

“We have shared challenges and many more shared opportunities,” Canadian International Trade Minister Maninder Sidhu told reporters last week in Dublin, where he was invited to participate in an informal meeting of EU trade ministers, a preview of what a more integrated Canada could look like. “Canada wants to be Europe’s most reliable partner.”

Sidhu said CETA utilization rates in EU member countries range from 60% to 80%, making a point about room for improvement and perennial challenges. “We know there’s room to grow.”

Von der Leyen’s associate membership plan “has been coldly received by member states,” a senior EU official said. “It [the summit] is more about what we do, how we can use the real potential of the CETA agreement.” CETA has been provisionally in force since 2017.

Trade talks between Canada and the bloc read like a lengthy transatlantic grievance list.

At a meeting between Brussels and Ottawa last October, the EU complained about Canadian taxes it says disproportionately hit European carmakers, opaque cheese-import quotas, cumbersome rules on cosmetics and what it considers discriminatory provincial taxes and markups on European wines and spirits.

Canada, meanwhile, warned that the EU’s deforestation rules could burden its exporters, questioned the impact of Brussels’ carbon border tax and pressed for greater recognition of Canadian standards in areas including AI.

The senior EU official described the relationship as constrained by “irritants and unfulfilled promises” that must be resolved if the two sides are to make progress.

There are hurdles ahead. Even as Canada and the EU imagine a deeper economic and security partnership, both are pursuing industrial policies that could shut the other’s companies out of lucrative public contracts — death by compounded trade barriers.

Brussels has concerns about Ottawa’s “Buy Canadian” initiatives and their compatibility with the EU-Canada free trade agreement. “Some member states didn’t like the ‘Buy Canada’ thing from Carney,” the official added.

Canada is likewise uncertain whether its companies will qualify for the EU’s proposed “Made in Europe” preferences foreseen in a major industry bill that would seek to channel public procurement spending to European companies. The EU is divided over whether to extend those preferences to trusted trading partners, a topic that is expected to come up in Montreal.

Canadian business leaders recognize the domestic appeal of “Buy Canadian” in the face of Trump’s threats, but warn there will need to be concessions.

“It’s something that will have to be resolved in order to move the relationship deeper, particularly with respect to industrial cooperation or collaboration,” Mark Camilleri, president of the Canada EU Trade and Investment Association, told POLITICO.

Camilleri likened the 10-year-old CETA deal to a garden overgrown with weeds. “It pains me to see market access being eroded through Canadian and European preferences,” he said.

Pressure is on

European and Canadian leaders are under pressure to deliver wins this week that demonstrate that “non-hegemons” — a descriptor Carney used in his Davos speech — can survive and thrive in an age of great-power rivalry.

Canadians currently support closer ties with Europe. But the EU faces political headwinds of its own, from fraught budget negotiations within the bloc to right-wing populist movements that are picking up momentum in some of its biggest economies.

One likely deliverable is a new digital trade agreement. Talks launched in March and were still underway last week. But the agreement lacks substantive text on artificial intelligence, leaving the two sides to find other places to cooperate, potentially through the EU’s proposed Cloud and AI Development Act. That proposal seeks to reduce reliance on U.S. tech giants, raising the risk of a new row with Washington. 

The European Commission is also pushing for Canada to join Erasmus+, the bloc’s student exchange program, according to one EU official. Carney has already publicly expressed interest. 

But Brussels has bigger ambitions for the partnership. The EU is pressing Canada to increase its funding for Ukraine, a test of Canada’s willingness to take on more of the security burden. 

For von der Leyen, securing that commitment would be a win. So would leaving the summit with a pledge from Carney to explore her offer of an “associate membership” — or whatever they end up calling it.

Zi-Ann Lum reported from Toronto, Sebastian Starcevic from Brussels and Camille Gijs from Dublin.