Ottawa inspired by NAFTA as it pursues a new Canada-EU alliance, Joly says

MONTRÉAL — Ottawa is drawing inspiration from the North American Free Trade Agreement as it works to develop a new alliance with the European Union, Industry Minister Mélanie Joly says.

Joly told The Canadian Press that Canada’s trade agreement with the United States and Mexico fostered industrial integration that has worked effectively in North America for decades.

The minister said the accord, which has since been replaced by the CUSMA trade deal, could be a model for strengthening ties between Canada and the EU.

“NAFTA is an industrial partnership. It’s more than CETA,” said the minister, referring to the Comprehensive Economic and Trade Agreement with the European Union that took effect 10 years ago.

She said CETA was largely “about being able to export without tariffs.” Current discussions, she said, focus on developing deeper connections between Canadian and European industrial sectors like the ones NAFTA fostered for decades.

“We’re moving from a free-trade agreement to the idea of a common market,” she said in an interview that took place between working sessions and hallway discussions at the Canada-EU summit in Montreal.

Joly cited NAFTA’s rules of origin provisions, which allow officials to determine which goods are entitled to preferential tariff treatment.

“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.”

CETA “has never had that,” she said.

Joly said there is an “immense” opportunity for Canada to reduce its dependence on the United States by deepening its ties with Europe.

“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,” she said.

Canada already has several agreements with the EU, some of which were initiated under former prime minister Justin Trudeau. These agreements cover areas such as artificial intelligence and research funding.

In February 2026, Prime Minister Mark Carney’s government formalized Canada’s participation in the European program known as SAFE, which looks to accelerate defence procurement by EU member states.

Carney also has been hinting for months at the possibility of a closer relationship with Europe that would go far beyond existing agreements.

European Commission President Ursula von der Leyen has gone so far as to suggest Canada could become the first “associate member” of the EU.

The details of new relationship have yet to be defined and its benefits remain unclear.

Some of those answers could come on Friday, at the conclusion of the two-day summit.

Joly offered some clues. On Thursday, she visited the Montreal facilities of a French company, Nexans, which specializes in copper cables and wires for electrical systems.

“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 company managed to turn things around by finding new markets.

“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,” she 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.”

Closer ties with Europe could also reduce Canada’s reliance on the United States for undersea cables, Joly said.

The cables, which carry data between North America and Europe, are currently controlled by “Big Tech,” she said.

“We need undersea cables that connect Europe to Canada and are owned by European and Canadian interests,” she said. “That way, if we ever have a conflict, they can’t prevent us from accessing that flow of information and data.”

Canada has been mired in a trade war triggered by U.S. President Donald Trump for more than a year and a half. Europeans have not been spared the U.S. president’s attacks, although the situation is different for them because they don’t share a land border.

NAFTA was torn up by Trump during his first term. It was only after a long period of tariffs targeting Canada that Ottawa and Washington buried the hatchet by negotiating CUSMA.

During his current term, Trump has argued that CUSMA no longer serves the United States well and that it needs to be revised. Canada, the United States and Mexico have been drawn into an annual review of the agreement, which has meant a less predictable trading environment.

This report by The Canadian Press was first published Oct. 30, 2026.

Émilie Bergeron, The Canadian Press