Strategic Cooperation in an Uncertain World

The Security and Defence Partnership between Canada and the EU is the most comprehensive pact the EU has ever signed with a non-member, marking a major shift in transatlantic cooperation.

On 23 June 2025, Canada and the EU signed a landmark Security and Defence Partnership in Brussels, marking a major step in their ties. Announced at the 20th EU-Canada Summit, the deal, alongside pledges on trade, digital policy, and climate action, reflects a strategic shift amid changing global dynamics.

Canada and the EU formalised ties in 1959 with an agreement on peaceful atomic energy use. Since then, the partnership has grown to cover trade, security, and shared values of democracy and human rights. The cornerstone of economic ties is the Comprehensive Economic and Trade Agreement (CETA), signed in 2016 and provisionally applied since 2017. CETA eliminated 98 per cent of tariffs, boosting trade by 71 per cent and adding €3.2 billion to the EU’s GDP and €1.3 billion to Canada’s annually.

Politically, the Strategic Partnership Agreement (SPA), also signed in 2016, fostered dialogue on climate, security, and global governance. The EU is Canada’s second-largest trading partner; Canada is the EU’s 12th-largest export market. Cooperation also spans research, innovation, and joint support for Ukraine, with both being co-founders of the G7 Donor Coordination Platform.

But the global landscape has shifted. Rising tensions—Russia’s war in Ukraine, NATO uncertainty under Trump, and growing protectionism—have pushed both to reassess priorities. The latest pact reflects efforts to diversify partnerships and reduce reliance on traditional allies, especially the United States.

Key Components

The Brussels summit’s highlight was the Security and Defence Partnership, deemed the EU’s “most comprehensive” deal with a third country by Commission President Ursula von der Leyen. It covers crisis management, maritime security, cybersecurity, counter-terrorism, and support for Ukraine. It also allows Canada to join the EU’s €150 billion SAFE programme under ReArm Europe/Readiness 2030, enabling joint arms procurement and granting Canadian firms access to a €1.25 trillion market.

Beyond defence, leaders agreed to launch talks on a digital trade agreement to align standards, enhance cybersecurity, and collaborate on AI and quantum tech. They also committed to strengthening supply chains for critical raw materials and boosting industrial cooperation in clean technology. These initiatives build on CETA’s success while tackling digital and energy security.

The partnership also deepens climate cooperation via the EU-Canada Green Alliance and support for Ukraine’s recovery, including Canadian experts at the Ukraine Donor Platform. Together, these steps reflect a unified strategy linking security, economic resilience, and climate action.

The deal’s timing is crucial. Under President Trump, the US adopted protectionism—imposing 25 per cent tariffs on Canadian goods and 10 per cent on energy—while questioning NATO commitments. His threats to “annex” Canada and calls for allies to raise defence spending to 5 per cent of GDP have strained ties. With 75 per cent of its defence linked to the US, Canada must diversify partnerships.

For the EU, the pact aids efforts to strengthen defence amid Russia’s war in Ukraine and doubts over US reliability. The €800 billion ReArm Europe plan signals Europe’s push for strategic autonomy. Canada’s joining SAFE boosts transatlantic security and economic opportunities.

The partnership also responds to global challenges. China’s rise, fragile supply chains, and the race for AI and critical minerals demand closer cooperation. Shared values and economic synergy make deeper Canada-EU ties logical.

Geopolitical consequences

The Canada-EU partnership could reshape global alliances and trade. It strengthens the transatlantic framework beyond US-led structures, integrating Canada into Europe’s defence architecture to complement NATO and offer an alternative security network.

It may also influence global trade. A digital trade agreement could set data and AI standards, shaping norms. For India, negotiating an FTA with the EU and CEPA with Canada could ease trilateral cooperation in tech and critical minerals. However, rising US-EU tensions risk trade disruptions, as diverted Canadian steel and aluminium might trigger EU safeguards.

The pact also backs multilateral action on climate and Ukraine, increasing pressure on Russia through sanctions and aiding reconstruction.

Challenges remain: full CETA ratification is pending in 10 EU states; Canadian domestic resistance over defence spending may stall progress; and worsening US-Canada ties could invite economic retaliation, affecting Canada’s EU commitments.

Geopolitically, India benefits from a stable transatlantic axis. A stronger Canada-EU link could balance China’s influence and bolster multilateral bodies like the G7, where India is a regular guest. Yet India must maintain strategic autonomy while managing ties with the US, EU, and Canada and expanding its role in the Global South.

The Canada-EU Strategic Partnership of June 2025 marks a bold step toward a stronger transatlantic alliance. By deepening ties in security, trade, and climate, both sides are responding to global volatility. For India, it underscores the need for diversified partnerships and active global engagement. Amid rising protectionism, rivalries, and climate threats, the pact offers a model for broader cooperation—if it overcomes internal and external hurdles.

(The writer is a foreign affairs expert. Views personal.)