Canada looks to NAFTA as model for deeper EU alliance, Joly says

MONTREAL · Canada is looking to the old North American Free Trade Agreement as a model for a new, deeper alliance with the European Union, Industry Minister Mélanie Joly says. Joly told The Canadian Press that NAFTA fostered an industrial integration that worked effectively for decades in North America. She said the accord, since replaced by CUSMA, could be a model for strengthening ties between Canada and the EU. The minister made the comments during the Canada-EU summit in Montreal, where discussions are focusing on moving beyond a simple free-trade deal.

“NAFTA is an industrial partnership. It’s more than CETA,” said Joly, referring to the Comprehensive Economic and Trade Agreement with Europe that took effect 10 years ago. She said CETA was largely “about being able to export without tariffs,” while current talks aim for deeper connections between industrial sectors. “We’re moving from a free-trade agreement to the idea of a common market,” Joly said in an interview between working sessions at the summit.

Joly cited NAFTA’s rules of origin provisions and shared certification standards as examples of the integration she envisions with Europe. “This ranges from the certification of our passengers and products at airports to the fact that we have the same certification standards for cars and electrical equipment,” she said. “If it’s certified in the United States, it’s automatically certified in Canada.” She said there is an “immense” opportunity for Canada to reduce its dependence on the United States by deepening ties with Europe.

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“Little by little, the flow of trade, which used to account for 75 per cent of our exports to the United States and has now decreased to 67 per cent … (we) will see that trade flows will shift toward Europe,” Joly said. The details of the new relationship are still being defined, and its full benefits remain unclear. Some answers could come on Friday at the conclusion of the two-day summit, which has seen Prime Minister Mark Carney hint for months at a closer relationship with Europe. European Commission President Ursula von der Leyen has suggested Canada could become the first “associate member” of the EU. Canada already has several agreements with the bloc, covering areas like artificial intelligence and research funding. In February 2026, Carney’s government formalized Canada’s participation in the European SAFE program, which aims to accelerate defence procurement by EU member states.

Lessons from a French cable firm

Joly offered a concrete example of the potential benefits during a visit to the Montreal facilities of French company Nexans, which makes copper cables and wires. “When the (U.S.) tariffs were imposed a few months ago, they lost 75 per cent of their business … It was going to kill the company,” she said. Joly said the company turned things around by finding new markets in Europe and Canada.

“Little by little, they reached 14 per cent of their output that they were able to ship to Europe, and the goal is to reach 20 per cent,” Joly said. “They’ve also gradually managed to expand their market in Canada, so they’ve regained about 75 per cent of the 75 per cent they had lost.” She said closer ties with Europe could also reduce Canada’s reliance on the United States for critical infrastructure like undersea data cables, which she said are currently controlled by “Big Tech.” “We need undersea cables that connect Europe to Canada and are owned by European and Canadian interests,” Joly said. “That way, if we ever have a conflict, they can’t prevent us from accessing that flow of information and data.” The push for a stronger European partnership comes as Canada has been mired in a trade war triggered by U.S. President Donald Trump for more than a year and a half.

NAFTA was torn up by Trump during his first term, leading to a period of tariffs before Ottawa and Washington negotiated CUSMA. During his current term, Trump has argued CUSMA no longer serves the United States well and needs revision. Canada, the U.S. and Mexico are now drawn into an annual review of the agreement, creating a less predictable trading environment. The summit in Montreal continues through Friday.

With files from The Canadian Press, BNN Bloomberg and The Globe and Mail