MONTRÉAL — Industry Minister Mélanie Joly has revealed that Canada is looking to draw inspiration from the North American Free Trade Agreement (NAFTA) as it seeks to develop a new alliance with the European Union. In an interview with The Canadian Press, Joly emphasized that Canada's trade agreement with the United States and Mexico has fostered industrial integration that has effectively played a significant role in North America for decades.
The minister noted that the older trade accord, which has been replaced by the United States-Mexico-Canada Agreement (CUSMA), could serve as a model for enhancing ties between Canada and the EU. She remarked, "NAFTA is an industrial partnership. It’s more than CETA," referencing the Comprehensive Economic and Trade Agreement (CETA) with the European Union, which came into effect ten years ago.
Joly indicated that while CETA was primarily about facilitating exports without tariffs, the current discussions are directed towards creating deeper connections between Canadian and European industrial sectors, similar to the ones developed under NAFTA over the years. "We’re moving from a free-trade agreement to the idea of a common market," she stated during her interview, which was conducted amid working sessions and hallway conversations at the Canada-EU summit in Montreal.
In discussing NAFTA, Joly mentioned its critical rules of origin provisions, which help officials determine which goods are eligible for preferential tariff treatment. She highlighted how these rules extend from the certification processes for passengers and products at airports to uniform certification standards for vehicles and electrical equipment. "If it’s certified in the United States, it’s automatically certified in Canada," she explained. However, she pointed out that CETA has never implemented such provisions.
Joly conveyed a sense of "immense" opportunity for Canada to lessen its reliance on the United States by strengthening ties with Europe. She highlighted a shift in trade dynamics, stating that trade flows to the U.S., which once accounted for 75% of Canada’s exports, have now dropped to 67%. Joly anticipates this trend will continue, as more trade is expected to flow towards Europe.
Canada already has multiple agreements with the EU, some of which were initiated under former Prime Minister Justin Trudeau. These agreements cover various fields, including artificial intelligence and research funding. In February 2026, under Prime Minister Mark Carney's administration, Canada formalized its participation in an EU program known as SAFE, aimed at accelerating defense procurement among EU member states.
Furthermore, Carney has been signaling for several months regarding the potential for a more profound relationship with Europe that transcends existing agreements. European Commission President Ursula von der Leyen even suggested that Canada might become the first "associate member" of the EU. However, the specifics of this prospective relationship have yet to be defined, leaving the benefits still uncertain.
Insights into this evolving relationship could emerge at the conclusion of the two-day summit. Joly provided some hints during her visit to the Montreal facilities of French company Nexans, which specializes in copper cables and wires for electrical systems. She noted the challenges the company faced when U.S. tariffs were imposed, causing a 75% loss in business. However, the company successfully found new markets, with 14% of its output now being shipped to Europe, and it aims to increase that figure to 20%.
Additionally, Joly remarked that closer ties with Europe could aid Canada in becoming less dependent on the U.S. for undersea cables that carry data between North America and Europe. She expressed the need for undersea cables that interlink Europe to Canada, owned by Canadian and European interests, emphasizing that this would protect them from potential disruptions in the event of future conflicts.
As Canada navigates a trade landscape affected by tariffs and disputes initiated during U.S. President Donald Trump's administration, the nation has been engaged in a protracted trade war. While the U.S. has targeted Canadian interests, the situation is different for Europe, as the two do not share a land border. Trump dismantled NAFTA during his first term, leading to a long struggle until Ottawa and Washington reached an agreement through CUSMA. Currently, Trump has called for revisions to CUSMA, asserting it doesn't serve U.S. interests well, thereby creating a less predictable trading environment for Canada, the U.S., and Mexico.
