Why Canada Cannot Join the EU (and Should Not Want to Do So)

Facing pressure from a US president who suggests Canada become the 51st state, Canada looks to Europe for new alliances. Historical ties and shared democratic values make Europe a natural partner. However, joining the EU is not feasible or advisable. Instead, Canada should adjust its economy and infrastructure to facilitate east-west trade rather than relying only on north-south routes.

Against the backdrop of repeated US threats of annexation, suggestions that Canada join the European Union keep popping up. A recent poll even indicated that 44 percent of Canadian respondents believe their country should join the EU, while only 34 percent oppose the idea. For years, I have humorously suggested this at my Canadian in-laws' Christmas dinner table. (In the run-up to Brexit, I suggested tongue-in-cheek that Canada could perhaps replace the UK.) Under the second Trump administration, the joke suddenly seems to be taken seriously by academics and think tankers, including e.g. Université de Montréal’s Frédéric Mérand in a policy paper for the Institute for Research on Public Policy, a Montreal-based thinktank.

Canada cannot join the EU

While acknowledging the sentiment, it is necessary to emphasize, as other EU lawyers such as Steve Peers and Steven Blockmans and a European Commission spokesperson have done, that Canada cannot become a member state of the EU. EU membership is restricted to “European States,” a term interpreted geographically to include states on the European continent. Granted, Europe's geographic borders are sometimes ambiguous (for example, the Caucasus region). There are also transcontinental countries such as Russia and Turkey.

Yet some countries are clearly not located in Europe, such as Canada. In 1987, Morocco applied to join the European Communities (the precursor to the European Union) by sending a letter to French President Mitterand, whose country held the presidency of the Council at that time. Morocco’s application was rejected because it did not meet the requirement of being a "European country" as outlined in the Treaty of Rome.

The letter sent to the Moroccan King Hassan II was very diplomatic, emphasizing the desire of the (then) EEC to build stronger ties with Morocco. No reference is made to Morrocco’s geographic location. However, in the Council’s internal debates, the Council Presidency did mention that EEC membership was open only to European states (see the screenshot. The full texts are available here).

Fragment of Council conclusions of 14 September 1987, available here.

Options for deepening ties with the EU

If Canada sent a similar letter to Mr. Costa of the European Council, it would likely hear that membership is not an option but deepening the relationship is. How can this be achieved? But more importantly, should Canada even seek closer ties with the EU? What would be the benefits, and what would be the costs?

As Frédéric Mérand has laid out in the policy paper mentioned earlier, there are different models. During the Brexit negotiations, then EU chief negotiatior Michel Barnier summarized the options in a graphic:

Slide presented by Mr Barnier to the European Council in January 2018.

The graph does not fully capture the complexities of the relationship between each of the models. For example, Ukraine has committed to adopting much of the EU’s rulebook through the association agreement it concluded with the EU, but it does have an independent trade policy, whereas Turkey has more regulatory autonomy but has joined the EU in a customs union, which limits its ability to conduct its own trade policy.

The graphic does give a sense, however, of what it would cost for Canada to move closer to the EU without the option of EU membership on the table. Norway, Iceland and Liechtenstein are for all intents and purposes part of the EU’s internal market. They are, however, rule-takers, not rule-makers as they are not represented in the EU’s decision-making bodies. To keep access to the internal market, they automatically follow EU rules.

This is different from the Swiss model: the EU-Switzerland relationship is governed by several bilateral agreements. All of these agreements are connected, in the sense that if Switzerland terminates one agreement, all other agreements would be terminated too, thus cutting Switzerland out of the internal market. (This is the so-called “guillotine clause”.) The Swiss-EU trade relationship significantly limits Switzerland's regulatory autonomy.

Integration with the European Union along the Norwegian, Swiss or even Turkish lines comes with a cost: Canada would become a rule-taker and would thus lose some of the sovereignty it is currently fighting hard to protect.

Greater resilience does not run through EU membership

As a long-time observer of Canada, my sense is that strengthening Canada’s sovereignty will need to run through internal action, by Canada’s federal government, to develop Canada’s internal market, and to make it easier for Canadian businesses to trade with partners other than the United States.

The trade agreement that Canada has signed with the EU, and which has been provisionally applied since 2017, offers opportunities for deeper trade ties. Already today, Canada and the EU can trade tariff-free. Yet to deepen EU-Canada trade in practice, Canada needs to build the infrastructure needed to get its exports to EU markets. East-west trade corridors have remained underdeveloped as Canada has gone all-in on trade with its southern border. Developing this infrastructure has been on the agenda for decades, as anxieties about excessive reliance on the United States are not new. Yet provincial opposition has stood in the way of concrete action. (Just a couple of days ago, Bloc Québecois leader Blanchet reaffirmed his opposition to a pipeline connecting Alberta to Nova Scotia.)

Integration can also be pursued in the field of services. The CETA agreement offers possibilities to negotiate and conclude mini-agreements to mutually recognize qualifications. One agreement has been reached on the mutual recognition of the professional qualifications of architects. More such agreements can be negotiated. They can be adopted through a simplified procedure.

There are no magic bullets for Canada to get out of its current predicament of excessive reliance on its unreliable southern neighbour. However, Canada has the resources to become more resilient, by reducing internal trade barriers and diversifying external trade. The CETA agreement can contribute to this effort, but ultimately, it is up to Canada to take the necessary actions to fundamentally restructure its economy.