The most revealing question in international trade is increasingly not how close a market is, but how much you can rely on it.
Price, proximity and logistics still matter. Yet businesses making long-term decisions must also consider whether market access will survive a political disagreement, whether regulations will remain predictable, and whether a critical supplier could become a strategic vulnerability.
The deepening relationship between the EU and Canada brings those questions into focus. It suggests a future in which shared values carry greater commercial weight than geographical closeness – through compatible standards, trusted institutions and cooperation in industries that governments regard as essential.
Mike Wilson, founder of Go Exporting, said of the latest shift in global trade winds that: “Trade is no longer simply about geography; it is increasingly organised around politics and shared values – democratic governance, environmental commitment, data standards, and the rule of law.”
This shift has been brought into the spotlight by the dramatic change in the relationship between the US and Canada, and Mark Carney’s strategic shift towards creating tighter economic alignment between his nation and other, more ‘trusted’, markets.
This has so far culminated in the proposal of an ‘associate member’ status by European Commission President Ursula von der Leyen, suggesting that Canada could be the first such member.
And other like-minded, value-matched countries could follow suit.
Canada offers a compelling test. Its appeal combines energy and industrial resources with the prospect of a dependable long-term relationship. The EU and Canada have explicitly identified critical raw materials, energy, forestry, clean technology and defence procurement as priorities for economic cooperation.
And the opportunity isn’t just for Canada – it exists for the EU, too.
“Canada is one of the most underrated trade partners in the world. It is the world’s fourth-largest natural gas producer, holds the third-largest proven oil reserves globally, and sits on enormous reserves of the critical minerals – lithium, cobalt, nickel – that the green transition depends on.
“Beyond resources, Canada is a trustworthy, stable partner, a G7 nation and NATO ally.
“In a world where supply chain security matters as much as supply chain efficiency, that’s an important consideration.”
Industries where closer alignment could present opportunities
For exporters, the opportunity of closer alignment extends beyond selling more finished goods or offering more friction-free services. Closer cooperation could support partnerships in engineering, processing, maintenance, research and specialist services. A European business may find its strongest opening as a supplier to a Canadian project, or through a joint venture, rather than by approaching Canada solely as a new customer market.
Clean technology is another key industry where partnership opportunities are apparent. Europe’s expertise in wind, hydrogen and smart grids is a potential match for Canadian green ambitions.
Defence is another example of strong institutional alignment. In June 2026, the EU Council formally concluded the agreement enabling Canadian companies and products to participate in procurement under SAFE, the EU’s defence investment instrument. Canada became the first non-European country to participate.
That creates reasons for manufacturers and specialist suppliers to investigate, and invest in, partnerships across the Atlantic. It does not guarantee contracts: eligibility, technical requirements and a place in the relevant supply chain still have to be established.
Business loves certainty so it can plan and invest.
And in this current global climate, alignment on values, rather than historic ties and even legal agreements, seems to present the strongest chance of cooperation, alignment, and creating an environment for growth.
Closer alignment will increase competitive pressure
More choice for goods, services, supply routes, and ways of manufacturing, increases competition. For incumbents, this presents a challenge to their market position. For newcomers, an opportunity for growth. Overall, more competitive pricing and innovation.
For example, European timber producers should consider whether stronger Canadian relationships could bring more competition for construction and industrial customers.
And vice versa.
“The honest message for exposed sectors is to differentiate on quality, provenance, and brand now, before the competitive landscape shifts further,” continues Mike Wilson.
“My advice is simple: don’t wait for the agreement to feel real before you start moving.”
That means preparing for opportunities, rather than assuming future negotiations will deliver them. Export trade consultants like Go Exporting can help in this area.
A regional strategy matters too: “Doing business in Quebec is a materially different experience from Ontario or Alberta, and if you’re entering without a regional strategy, you’re not really entering Canada.”
The relationships require patience. In Mike’s experience, exporters can misread a measured approach to negotiations as a lack of interest. Choosing a market is only the beginning; understanding how potential partners assess risk and build confidence is part of the work.
Could this approach extend to Australia and the UK?
Australia is already strengthening its own European relationship. The EU and Australia concluded free trade agreement negotiations in March 2026 and have also signed a Security and Defence Partnership.
That doesn’t necessarily mean Australia will look to gain associate member status (something that is still to be defined and has no legal footing), but the mood music does suggest even closer ties in one form or another.
Another potential outcome is more of a network of overlapping partnerships: different countries participating in different combinations of trade, research, defence and regulatory cooperation. Its attraction would be greater resilience without requiring every partner to adopt the same institutional relationship, something that a post-Brexit Britain and nations with more isolationist politics may find more appealing as a safer middle ground.
What we must guard against, though, is values-based trade becoming shorthand for shutting everyone else out.
A ‘you’re not in our gang’ approach to global politics, trade, and cooperation.
Excessive fragmentation would raise costs and narrow opportunities, and deepen political rifts.
The challenge is to strengthen reliable partnerships while keeping trade open enough to support competition, innovation and growth.
The United States remains central to this calculation. In 2024, it received 75.9% of Canada’s merchandise exports, underlining the scale of the relationship that diversification must complement. Europe cannot simply replace that market. The strategic objective for Canada therefore is to build alternatives so that dependence on one partner does not become dependence on one government’s next decision.
For Britain, the lesson is to pursue practical cooperation while recognising that Canada offers no ready-made template. A UK-EU reset would have to address Britain’s own economic relationship, political choices and obligations.
For UK businesses, the longer-term future may nevertheless involve substantially closer European integration. Prime Minister Andy Burnham has signalled openness to considering a range of options, including full EU membership, reopening a conversation with potentially far-reaching commercial consequences… something a growing majority of the UK population (including business population) would welcome.
Businesses shouldn’t base investment decisions on an assumed outcome. But the firms best placed to benefit from closer integration will be those already earning trust, meeting the relevant standards and demonstrating what they can contribute.
