Abstract:
According to people familiar with the matter, Carney has appointed a special envoy to Europe to study the most ambitious cooperation plans in addition to formal EU membership or joining the common market. Technical working groups are still working out the details. The prime minister told aides the arrangement would restructure Canada's economic and social landscape that has been dominated by the United States for half a century.
Officials from both sides said Carney even proposed to European leaders that Canada create a new identity: "EU associate member state." The EU, which has always been inflexible in its membership rules, is open to the idea.
In addition to Carney's formal envoys, there is also a group of informal advisers from the financial and political circles involved.
After months of negotiations, officials from the EU and Canada are working on a plan to allow Canada to informally access Europe's $21 trillion single market, covering key minerals needed for energy, artificial intelligence, batteries and semiconductors, as well as the most pressing strategic supply chain areas such as defense.
In fact, Canadian goods, services and workers in the above-mentioned industries are expected to eventually flow freely between Europe and the United States' northern neighbor, blurring the division of EU economic borders. In discussions with France, where President Emmanuel Macron communicates regularly with Carney, the two sides even floated the idea of allowing Canadians to live and work in Europe without a visa, two officials familiar with the matter said.
The two sides are discussing laying submarine optical cables to connect Europe and Canada, and jointly building data centers, cloud storage and new satellite networks that are not controlled by American technology giants. Carney is pushing for the construction of a gas pipeline to transfer Canadian natural gas originally destined for the United States to European allies who are still struggling to replace Russian energy. In his vision, icebreakers would open up Arctic shipping lanes and allow Canadian fertilizer to be transported eastward via the Northwest Passage. The Northwest Passage has attracted explorers for centuries to the polar waters.
Canada and the European Union plan to link up scientific research institutions and build a scientific research results network to benchmark the American university system. Carney also actively promotes Canada's accession to the European Union's study abroad program, hoping that the younger generations of Europe and Canada will be able to study in universities in each other's countries.
The overall issues involved in the negotiations are often mired in technical details such as European rules of origin coding, which the White House has paid little attention to. But this overall constitutes one of the most significant and risky responses to Trump's second term globally. Two-thirds of Canada's exports pass through the world's longest land border. Canada and the United States have always been the two pillars of the Western economic and geostrategic alliance. The White House is betting that the interdependence between the two parties will force Canada to return to the negotiating table and make concessions.
Any new alliance is likely to encounter potential obstacles. Although Carney's approval ratings are currently high, his support at home may slip once Canadians fully realize the full consequences of this strategic change. Ottawa needs to deal with separatist forces in Alberta and Quebec, and the Canadian government may show resistance to ceding any sovereignty to connect with the European Union. Countries that trade freely with the EU are usually required to contribute to the EU budget, accept workers and comply with its regulations. In addition, the European economic growth rate is only half of that of the United States, and it is difficult to replace the trade market facing the southern United States under the original framework of the North American Free Trade Agreement.
A U.S. official said: "With the United States gradually weakening its role in the global final consumer market, it is still unclear whether Canada and the EU are ready to take over this important task and absorb each other's production capacity."
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