Canada wants closer EU ties. But we already have close EU ties – and they’re a mess

Published by The Globe and Mail.

By: Lawrence Herman 

For a multitude of reasons, Canada will never become an “associate member” of the European Union. It was never in the realm of possibility.

European Commission President Ursula von der Leyen would have known this. Her offer last week at the European Parliament wasn’t off the cuff but was carefully orchestrated within EU circles and was done for symbolic purposes, a clear signal to certain unnamed powers that Canada and Europe have shared geopolitical interests and can work together as close political and commercial allies in today’s hegemonic world.

In response to Ms. von der Leyen’s offer, Prime Minister Mark Carney spoke about a “deeper partnership,” an “alliance of the future,” building a productive relationship without taking the further, formal step of associate membership.

Hovering in the background to these declarations of shared interests, but given relatively little play, was a transatlantic deal that’s already in place. The Canada-EU Comprehensive Economic and Trade Agreement is a groundbreaking free-trade pact that, together with reducing tariffs, confirms both sides’ commitment to “international security, democracy, human rights and the rule of law for the development of international trade and economic co-operation” and other shared objectives.

CETA was signed in 2016, the product of extremely hard bargaining over many years. But even after a decade, the agreement is still only in force provisionally. While duties are mostly zero, large parts of the deal are in limbo because of opposition to ratification on the European side. It’s up to EU leadership to resolve these internal roadblocks as part of the effort to form a broader alliance with Canada.

The problem is that CETA is a “mixed agreement” in EU parlance, with competence divided between the EU Commission in Brussels on one hand and the individual member states on the other. While the commission has authority over trade and tariffs, individual member states retain authority over internal matters.

Because CETA involves a lot of those matters, full ratification requires the approval of all 27 governments. So far, only 17 have done so, while major countries such as France, Ireland, Italy and Poland have so far refused.

Most of this opposition reflects deep-seated agricultural interests. Other sticking points include geographical indications, trademarks and public procurement, as well as the investment articles. Opponents argue that the agreement gives Canadian companies the power to sue governments and prevent them from legislating on the environment, labour and consumer rights, as well as health and food safety policy.

The result is that while the duty-free parts of CETA have taken effect, a lot of the advantages that Ottawa bargained for, where compromises were made and where Canada can legitimately expect reciprocal benefits, are being stymied by these local anti-free-trade interests.

Put another way, how can Canada and the EU work out a broader geostrategic partnership if they can’t even resolve these nuts-and-bolts issues on the ground?

Other problems must be addressed. Since CETA began provisionally in 2017, European companies have been the major beneficiaries. Canada has run billion-dollar trade imbalances with the EU every year. In merchandise trade, the deficit was around $48.8-billion in 2025, according to Statistics Canada. The services sector sees a similar situation, with a deficit in 2025 of $7.1-billion, an increase from $6.4-billion in 2024.

Among the reasons is that duty-free benefits for the Canadian side are hampered by the myriad of complex European rules and regulations, both at the commission level and in individual countries. As well, an array of non-tariff barriers are serious impediments to Canadian companies doing business there, including complex sampling, testing and other requirements for getting agricultural goods into the European market.

The point is that building a new transatlantic alliance should start with what we have. Get CETA fully operational. Remove the roadblocks to full EU ratification. Get rid of European non-tariff barriers that have bedevilled Canadian enterprises.

At the same time, both sides should look for ways of enhancing and modernizing CETA in areas such as cybersecurity, digitization and artificial-intelligence regulation. These are building blocks for structuring the new and dynamic transatlantic alliance that the PM spoke about last week.

Canada has challenges at its door. Much closer business-government collaboration – on a determined and sustained basis – is needed as part of the strategic move away from overdependency on the U.S. market, and toward realizing the vast range of opportunities across the Atlantic. But that requires the EU to get CETA fully up and running. After all, a deal is a deal.

Lawrence Herman is counsel at Herman & Associates, a member of the Expert Group on Canada-U.S. Relations and a senior fellow at the C.D. Howe Institute in Toronto.