A Wall Street Journal investigative report indicates that Canada’s effort to diversify from the US and forge closer ties with the European Union is more than a bargaining chip in negotiations with the Trump administration.
"Wall Street Journal reporters spoke to officials from a dozen different governments involved in those conversations, who broadly described a prime minister whose ambitions...go beyond what Carney has publicly detailed.” According to the WSJ, the proposed new ties would go well beyond the Comprehensive Economic and Trade Agreement (CETA), the free trade pact between Canada and the EU negotiated in 2017 that several EU member states have yet to ratify. "The result of the monthslong talks: European and Canadian officials are eyeing ways in which Canada could informally lock into Europe’s $21 trillion single market in strategic supply chains such as energy, AI, the critical minerals needed for batteries or semiconductors and, most urgently, defense”, the report says. For the EU, a deeper relationship with Canada would provide access to energy and critical minerals as European governments seek to reduce their exposure to Russian supplies and Chinese processing. For Canada, the EU's single market — with roughly 450 million consumers and about $21 trillion in economic output — is the only bloc large enough to plausibly offset, at least partially, the loss of preferential access to the American market. "Within days of taking office, Carney’s team began to map the deals that the U.K., Norway, Switzerland and post-Soviet nation of Georgia had with the EU, short of full membership”, the Journal says. But EU officials were wary both of offending the Trump administration and the practical difficulties of allowing privileged access to the EU single market for countries which don’t pay into its budget or are bound by its regulations. “Two events—President Trump’s effort to gain control of Greenland and his war on Iran—jolted more European leaders to share Carney’s logic and urgency...By summer, Canadian and European officials were accelerating their discussions in a proliferating number of diplomatic backchannels.” Carney’s personal ties dating back to his tenure as Governor of the Bank of England have been an asset in talks with EU leaders, in particular France’s Macron and Germany’s Merz, but Trump’s policies have also encouraged his erstwhile allies like Italy’s Georgia Meloni to consider a closer strategic relationship with Canada at the expense of their traditional trade and military ties to the US. --------------------------------------------------------------- Mark Carney’s Audacious Bid to Make Canada an ‘Associate Member’ of the EU As trade talks with the U.S. collapse, prime minister pursues a major—and risky—pivot to Europe; an Ottawa book club plays its part By By Drew Hinshaw in Ottawa, Joe Parkinson in Brussels and Laurence Norman in Berlin Wall Street Journal September 13 2026 https://apple.news/AVeDXRAYeQRW-UKYFggxQIA Shortly after Canada and America became embroiled in the worst bilateral trade war in their modern history, the secure phones of Europe’s top leaders lit up with a trans-Atlantic call. Mark Carney was pushing to take Canada’s relationship with the EU to the next level—a bold gambit to rewire the economic cabling of the Western alliance. For months, the Canadian prime minister had held private conversations with almost every major European leader—from France to Italy, Germany and Scandinavia and even some of the continent’s lesser-known royals—on how to more deeply plug Canada and its 41 million people into Europe’s 27-nation club. Now, Carney was accelerating Canada’s pivot to Europe, matchmaking a shotgun marriage to offset the pain of its divorce with America. In effect, a threat to make Canada the 51st state is pushing America’s northern neighbor so close to Europe that leaders have begun to half-in-jest dub it the EU’s newest member. Carney has instructed his special envoy to Europe to scope out the most ambitious possibilities short of full membership in the EU or its common market, according to people familiar with the matter. The details are still being sketched by technical working groups for what the prime minister has told his aides will be the reorienting of an economy and a society that for half a century has been dominated by the U.S. To European leaders, Carney has even suggested Canada take on a new title: “Associate Member of the European Union.” The EU, not known for its flexible enforcement of membership rules, is open to the idea, officials from both sides say. Alongside Carney’s established emissaries are informal advisers drawn from the worlds of finance and politics. Some are fellow members of a Book Club in Ottawa that he no longer has time to attend, who quip that they abide by the code of the movie “Fight Club”: “The first rule of Book Club,” several told the Journal, “is you do not talk about Book Club.” The result of the monthslong talks: European and Canadian officials are eyeing ways in which Canada could informally lock into Europe’s $21 trillion single market in strategic supply chains such as energy, AI, the critical minerals needed for batteries or semiconductors and, most urgently, defense. In practice, Canadian goods, services and workers for those industries could eventually move frictionlessly between Europe and America’s northern neighbor, blurring the lines of where the EU’s economic borders end. In conversations with France, whose president, Emmanuel Macron, speaks to Carney often, the idea has even come up to allow Canadians to live and work in Europe visa-free, two officials familiar with those discussions said. The two sides are talking about laying underwater cables to link Europe and Canada, and jointly constructing data centers, cloud storage and new satellite networks beyond the reach of American tech giants. Carney is pushing to lay the pipelines Canada needs to redirect gas—normally pumped across the U.S. border—to European allies still struggling to replace Russian energy. Icebreakers, in his vision, would clear an Arctic path for Canadian fertilizer to sail east, over the Northwest Passage that lured centuries of explorers into the Polar sea. Canada and the EU are looking to intertwine research institutions to create a network of scientific output to compete with the U.S. university system. Carney is pressing to join the EU’s study-abroad program, as well, hoping a generation of Europeans and Canadians will attend university in each other’s homelands. The full scope of the talks, often mired in technical details like European rules-of-origin codes, has barely registered in the White House. But it adds up to one of the world’s most significant—and risky—reactions to the second Trump presidency. Canada ships two-thirds of its exports across the world’s longest land border. The two countries have been twin pillars of the economic, geostrategic alliance called the West, and the White House is wagering their interdependencies will drag Canada back to the negotiating table, concessions in hand. Carney—who studied in Europe, met his wife in the U.K. and ran the Bank of England for seven years—is placing a counter-bet that he can shift the country once known as British North America back toward the Old Continent. “Wouldn’t it be lovely if Canada was the 28th state of the European Union rather than the 51st state of the United States?” asked Finnish President Alexander Stubb, who speaks regularly with Carney. Any new alliance faces potential stumbling blocks. Although Carney is hugely popular for now, his domestic standing could erode as Canadians absorb the full consequences of a realignment. Wrangling with separatists in Alberta and Quebec, Ottawa might bristle at relinquishing any sovereignty to link into the EU. Countries whose firms have full access to the bloc’s single market pay into the EU budget, accept its workers and follow its regulations. Moreover, Europe would be hard-pressed to substitute for the southbound trade once heralded by Nafta, with an economy growing at half the pace of America’s. “As the U.S. is reducing its role as the global consumer of last resort, it is not clear that either Canada or the EU are ready to take up that mantle to absorb each other’s production,” said a U.S. official. In private discussions, some of Europe’s most senior officials have worried about grounding Carney’s ambitions to reality. Ten European countries have yet to ratify a previous trade agreement with Canada reached a decade ago. In their meetings, EU officials have tried to probe whether their Canadian visitors are using them as props in counter-negotiations with Washington. Scarred by Brexit, they can’t offer Carney terms so generous that other members think of leaving and demanding a Canada-style arrangement. Still, some European officials are starting to see the Maple Leaf nation as a test of whether their famously bureaucratic union can offer new, more malleable terms of inclusion for like-minded democracies looking for reliable partners. Earlier this week, senior EU officials debriefed European ambassadors in the glass-paneled Brussels office tower popularly known as “the Space Egg.” The message: If talks succeed, Canada will become closer than any other country outside Europe. On Thursday, Carney will address the European Parliament to flesh out his vision to link up with Europe. The two sides will announce a number of new working groups at a bilateral summit soon after to try to turn ideas into concrete projects. Wall Street Journal reporters spoke to officials from a dozen different governments involved in those conversations, who broadly described a prime minister whose ambitions—to make Canada European again, some joked—go beyond what Carney has publicly detailed. While there are multiple hurdles to dance around, European officials envision major Canadian companies could effectively lock in as single market suppliers for decades to come. Though officials stress they are hiding nothing from the White House, they share a new wariness toward the U.S. and its tech giants: Some on both sides have quietly stopped using U.S. platforms like Gmail or WhatsApp. “This is tectonic change by working groups and bureaucracy. It’s terribly unsexy but terribly consequential nonetheless,” said one Canadian official involved in the talks. Back to the future Canada’s pivot to Europe is a back-to-the-future moment for a country that traded more with Europe than America on the eve of World War II. Its oldest citizens grew up as British subjects, its anglophones reading English literature like John Buchan, the Scottish novelist who became Canada’s 15th governor general. French Canadians, of course, had their own particular links to Europe. “In those days, Canadians could be on Monday, Wednesday and Friday North Americans, the other days of the week they could be part of the British network of nations and benefit from both,” said Norman Hillmer, one of the leading scholars on North American relations. Canada emerged from the war into a new world order of global trade shaped around the economic powerhouse of America. While Britain and Europe focused on rebuilding their shattered economies and shed far-off empires, Canadian business looked south, influenced by the dynamic consumer culture and the lure of the dollar. By 1950, 65% of Canada’s exports went to America; just 15% went to the U.K. American colleges became incubators of a new Canadian elite, whose parents had attended British universities; by the late 60s, those campuses also fostered a Vietnam-era counterculture that was skeptical of American power. The tractor-beam of Americanization was briefly interrupted when Richard Nixon imposed 10% tariffs on all imports—to stabilize the dollar after the end of the gold standard. Canadian Prime Minister Pierre Trudeau responded by pledging to increase trade with the European common market and its newest member, the U.K. It bore little fruit, and was eclipsed entirely when his conservative successor, Brian Mulroney won the 1984 election and began working with Ronald Reagan on what would evolve into Nafta. Canadians skeptical of integrating North America’s two largest economies wore pins that read “51st state: Mulroney for Governor.” Nafta transformed Canadian society. As the country welcomed the new millennium, ties to Europe had faded, especially as a new crop of immigrant Canadians arrived from Asia and the Caribbean. On the eve of the 2008 financial crisis, America’s economy was integrating so fast with its neighbors that several U.S. state legislatures felt compelled to pass resolutions opposing a “North American Union” with a single, Euro-style currency. That year, the Bank of Canada appointed a new governor, 42-year-old Mark Carney, who had emerged from both shores of the trans-Atlantic elite, graduating from Harvard and meeting his British wife at Oxford, where both played ice hockey. The bruising recession that followed left the central banker convinced the global economy had become too dependent on the U.S. and its reserve currency. As governor of the Bank of England, he advocated for medium-size countries to find, or invent, a dollar alternative. London by then was extracting itself from the EU, an ironic crash course in European bureaucracy for a technocrat now trying to lead Canada the other way. When Carney ran for prime minister, his Liberal party had been in power for 10 years and he faced a 25-point deficit in the polls. It turned around almost immediately after Trump began threatening to turn Canada into the 51st state. Last week, Trump posted an AI-generated image of him standing over Carney with a hockey stick and a speech bubble saying “get up Governor!” Carney has defined the strains in bilateral relations as “a rupture, not a transition,” warning Canadians the profound political shifts unleashed by Trump are likely to outlast his term. It “is the end of history for more than 100 years of close American-Canadian cooperation,” Hillmer said. Other fish in the sea Within days of taking office Carney’s team began to map the deals that the U.K., Norway, Switzerland and post-Soviet nation of Georgia had with the EU, short of full membership. They made a list of 36 functions nations perform for each other—passing along intelligence, or sharing regulations—and ticked the categories where Europe and Canada could do more together. In conversations with European leaders he’d known as a central banker, Carney was workshopping proposals to deepen ties that were far ahead of most European officials. New ideas were flowing from conversations with members of his Book Club, the clique of senior figures in business and politics bonding over the short novels they had time to read. Many had lived in Europe, as students at Oxford or the London School of Economics, and had come to know each other when their children attended the same schools and summer camps. One Book Club member described the prime minister’s geopolitics using a dating metaphor: “Canadians should realize there are more fish in the sea than the United States.” But when Carney appointed Canada’s special prime ministerial envoy to Europe, the veteran diplomat John Hannaford, last October, it took more than two months before EU Commission President Ursula von der Leyen appointed his counterpart, a Dutch 30-year veteran of the Commission, Joost Korte. Several European leaders, including Italy’s conservative Prime Minister Giorgia Meloni and British Prime Minister Keir Starmer, were worried about provoking the U.S., European and Canadian officials said. Two events—President Trump’s effort to gain control of Greenland and his war on Iran—jolted more European leaders to share Carney’s logic and urgency. Already speaking regularly to Stubb, Macron and Norway’s Prime Minister Jonas Støre, the Canadian leader also began lobbying more Trump-friendly leaders, including Meloni. Early on, she was cautious about antagonizing Trump. After the president posted an AI-generated image of himself as pope in May, then claimed Meloni had begged him for a picture together, she changed tack. She now speaks to Carney more often than Trump, European officials said. By summer, Canadian and European officials were accelerating their discussions in a proliferating number of diplomatic backchannels. On the sidelines of the preliminary meetings for the G-7, in the French city of Toulouse, Canadian officials and their European counterparts sketched out what they called “11 stack items” for deepening collaboration and reducing dependence on American technologies, defense equipment and trade. Ahead of the G-7 leaders meeting in Evian, France, Carney met Macron in Paris and French officials came away floored by how fast the Canadians wanted to move. “Things suddenly accelerated to full-scale cooperation on many, many policies,” said a French diplomat. Carney was by now speaking frequently with Germany’s Chancellor Friedrich Merz, whom he knew from his time in banking, as the pair completed negotiations for Canada’s $25 billion purchase of German submarines. In July, at the Ankara NATO summit, the leaders showcased the agreement in front of a meter-long mock-up of the submarine that German officials had flown into the Turkish capital wrapped in a protective cover that one official said resembled an Egyptian sarcophagus. When a photographer pointed out the model to the leaders, Carney quipped that “we didn’t notice it because of the advanced stealth characteristics” of the vessel. After Carney’s somber press conference to explain the breakdown of U.S. talks and accuse Washington of moving the goal posts at the last minute, Merz reached out to the Canadian leader. As Trump was signing an executive order to rename Lake Ontario “Lake America,” Canadian diplomats were in Berlin for a day of meetings on defense cooperation. “This is Canada turning from looking at itself as a North American nation to a trans-Atlantic nation,” said a senior Canadian official. “Canadians, we sound like Americans, we dress like Americans, but as a society we’re much more European.” -=-=-=-=-=-=-=-=-=-=-=- Groups.io Links: You receive all messages sent to this group. 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