Canada and the European Union held a summit in Montreal last Friday, signing agreements on investment, digital trade, competition, computing and border security, and agreeing to negotiate a broader partnership next year. The agreements and planned closer ties come as Carney seeks to reduce his country's reliance on the US market amid trade tensions and inconclusive negotiations with the Trump administration.
The trade relationship between the US and Canada fractured in September after earlier trade talks broke down following last-minute US demands, including abolishing Canada's French-language content rules and gaining exclusive access to Canadian minerals. President Donald Trump then imposed tariffs on about $20 billion of Canadian exports, and Canada responded with retaliatory tariffs on a similar value of US goods.
In recent days, the tone has softened. Trump said over the weekend that after speaking to Carney, there was a concept of a deal "that's going to be great for our farmers, great for our country, and it will be fine for Canada." Carney described the discussions as "constructive" and said any deal must "fully respect Canada's languages, culture and sovereignty."
But the negotiations were not concluded before this week's US midterm elections, and the parties remain some distance from an agreement. Carney has said he is prepared to wait for a new US president if necessary. "We'll have to, if that's what it takes, and American families, American businesses, will lose out because of that," he said.
Carney has been actively pursuing trade deals with other partners, including the EU, India, Japan and Turkey. He aims to double Canadian exports to non-US markets by 2035. Matters being canvassed include a new bank payments system that would bypass US dominance, cooperation on digital and national security, science and space programs, and new fibre optic cables linking Canada, Europe and Asia.
Von der Leyen had talked about Canada becoming an “associate member” of the EU, but the term was quietly dropped from public discussions after pushback from some member states, notably Germany. Instead, the two sides are discussing greater economic integration without Canada joining the union.
Domestically, Carney is fast-tracking major energy infrastructure projects, including a new pipeline from Alberta's oil sands to Canada's west coast that would carry a million barrels a day and open up Asian markets. He has also fast-tracked gas projects that could mean exports to non-US markets double by 2030. Carney described Canada's potential as “an energy superpower” last month.
Trump has threatened more tariffs on the EU if a Canada-EU deal is struck with "bad intentions", and called the idea of Canadian associate membership "laughable". He labelled Canada "a terrible trading partner".
The trade war has been a topic in the US midterm campaigns, with Trump's approach to Canada not favourable to Republicans. Carney has the support of a majority of Canadians for his diversification strategy.
Analysis
Why This Matters
- The outcome of US-Canada trade talks will have direct effects on prices and supply chains across North America.
- Canada's pivot to the EU represents a potential shift in global trade alliances, reducing US influence over its northern neighbor.
- Carney's domestic energy push could alter global oil markets by providing new supply routes independent of the US.
Background
The US and Canada have been in a trade dispute since September when talks broke down and Trump imposed tariffs on Canadian exports. Canada retaliated with its own tariffs. The dispute has been a central issue in the US midterm elections.
Key Perspectives
Donald Trump: Says there is a concept of a deal that would be good for the US and fine for Canada, but dismissed the Canada-EU associate membership idea as "laughable" and labeled Canada a "terrible trading partner."
Mark Carney: Called the discussions constructive and insists any deal must respect Canada's languages, culture and sovereignty. He is prepared to wait for a new US president if necessary and is actively diversifying Canada's trade relationships, with the EU at the centre.
European Union (Ursula von der Leyen): Proposed Canada become an "associate member," but the term was dropped after pushback from some members, notably Germany.
What to Watch
- The outcome of this week's US midterm elections and its impact on Trump's trade policy.
- The next round of Canada-EU negotiations, due next year.
- Whether Carney's flagship pipeline project from Alberta to the west coast proceeds.
Checked
12 claims in this story checked against 1 source: 9 supported.
Show each claim
- SupportedCanada and the EU signed agreements at a summit in Montreal.Brisbane Times - Latest News: “Last Friday, Canada and the European Union held a summit in Montreal at which they signed agreements on investment, digital trade, competition, computing and border security”
- SupportedA US-Canada trade agreement remains uncertain.Brisbane Times - Latest News: “the parties are still some distance from an agreement. Trump’s notion of a fair trade deal, of course, is one tilted massively in America’s favour, so there is no certainty there will be an agreement.”
- SupportedCarney says he is prepared to wait for a new US president if necessary.Brisbane Times - Latest News: “Carney has said he is prepared to wait for a new US president if necessary to finalise a deal.”
- SupportedThe summit participants agreed to negotiate a broader partnership next year.Brisbane Times - Latest News: “they signed agreements on investment, digital trade, competition, computing and border security, and agreed to negotiate a broader and deeper partnership next year.”
- Not in the sourcesThe story presents “a concept” as words Trump directly said.Brisbane Times - Latest News: “The US president said at the weekend that, after speaking to Canadian Prime Minister Mark Carney, there was a concept of a deal”
- Partly supportedThe US imposed tariffs on about $20 billion of Canadian exports.Brisbane Times - Latest News: “Trump slapped new tariffs on about $US20 billion ($29 billion) of Canada’s exports to the United States.”
- Partly supportedUS negotiators demanded abolition of Canada’s French-language content rules and exclusive access to Canadian minerals.Brisbane Times - Latest News: “last-minute demands from the US negotiators – abolishing Canada’s French language local content rules and quotas, gaining exclusive access to Canadian minerals”
- SupportedCanada responded with tariffs on a similar value of US goods.Brisbane Times - Latest News: “Canada responded immediately with tariffs on a similar value of imports from the US”
- SupportedNegotiations were not concluded in time for the midterms, and the parties remained some distance from an agreement.Brisbane Times - Latest News: “The negotiations weren’t, however, concluded in time for the midterms and, it appears, the parties are still some distance from an agreement.”
- SupportedThe term “associate member” was dropped from public discussions after pushback, notably from Germany.Brisbane Times - Latest News: “after pushback from some EU members, notably Germany, that term – for which there is neither precedent nor definition – has been quietly dropped from public discussions”
- SupportedCarney aims to double Canadian exports to non-US markets by 2035.Brisbane Times - Latest News: “Carney’s ambition of doubling Canadian exports to non-US markets by 2035”
- SupportedThe proposed pipeline would carry a million barrels of oil a day and open up Asian markets.Brisbane Times - Latest News: “a new pipeline from Canada’s massive oil sands resources in Alberta to the west coast, which would carry a million barrels of oil a day and open up Asia and other markets for the first time.”