EU and Canada plan sweeping alliance to offset US-China dominance

The European Union and Canada are working toward a sweeping new partnership spanning trade, defense, critical supply chains, and space exploration, as both seek to carve out a counterweight to the dominance of the United States and China in global affairs, Bloomberg reported on Tuesday.investing

European Commission President Ursula von der Leyen is expected to announce the initiative during her annual State of the Union address in Strasbourg on September 16. Canadian Prime Minister Mark Carney will attend the speech — becoming the first foreign head of government to do so — and is set to address European lawmakers the following day.euronews+3

A Partnership Built on Shifting Ground

The alliance reflects an accelerating realignment driven by trade friction with Washington. Carney has been vocal about the fracturing of the rules-based international order, telling the World Economic Forum earlier this year that the old system has effectively broken down. His government has since pursued closer ties with the EU as the U.S.-Canada trade war has escalated under President Donald Trump's tariff policies.euronews+2

The planned framework aims to expand cooperation across critical supply chains, raw materials, space exploration, and scientific research, according to Bloomberg. Negotiations are also focused on strengthening joint defense capabilities, building on Canada's decision last year to become the first non-EU country to participate in the bloc's €150 billion Security Action for Europe (SAFE) defense procurement fund.pm+2

How Close Can Canada Get?

Officials on both sides are exploring how closely Canada can legally align with the EU's single market, though an EU official told Euronews that formal single-market access is not currently on the table and remains a theoretical debate. The partnership builds on the existing Comprehensive Economic and Trade Agreement, or CETA, which governs bilateral trade, though ten EU member states have yet to ratify it.euronews+2

The European Parliament signaled its support for deeper ties earlier this year, adopting a resolution calling for enhanced EU-Canada cooperation on security, defense, and trade by a vote of 482 to 108.europeaninterest

Next Steps

Both sides are scheduled to formalize next steps at a joint summit in Ottawa on October 29-30. At the G7 summit in June, Carney and von der Leyen announced new agreements on defense contracts and ocean conservation, with a Canadian firm securing the first contract awarded to a non-European company under SAFE.eunews+1

"This fall we will begin intense discussions with the European Union, the world's second-largest economy, to build a much stronger and deeper economic and security partnership," Carney said last month.politico