Canada inks wide defence pact with EU as Trump-era tensions reshape alliances

European Commission President Ursula von der Leyen (L) and European Council president Antonio Costa (R) with Canadian Prime Minister Mark Carney for an EU-Canada summit in Brussels. (Courtesy: Reuters photo)

Canada and the European Union agreed on Monday to a historic defence pact that further deepens their defence cooperation and gives Canadian defence firms unparalleled entry to European defence contracts — a move seen as a strategic realignment away from the United States in the face of rising world instability and waning American leadership under President Trump, the New York Times reported.

The deal, which European Commission President Ursula von der Leyen described as "the most ambitious we've ever signed," comes after President Trump's continued attempts to undermine historical alliances by disparaging US involvement in NATO and warning European allies to spend more on themselves.

A new era of coalitions

The agreement is a significant victory for Prime Minister Mark Carney, who came to office in April promising to cut Canada's reliance on a less stable United States. The deal provides Canada with entry to the EU's premier €150 billion ($173 billion) defence buying programme — a pool of money to improve Europe's collective defence system through cooperative defence projects.

Carney's decision to move closer to Brussels, and recent similar deals Britain and Australia signed, marks the start of a new web of defence deals to counter Trump's threat to withdraw American military commitments.

"At times of adversity, true friends arrive," von der Leyen stated, a discreet swipe at Washington's retreat. "This deal takes our partnership to a new level."

A blow to US defence influence

The EU defence fund also has a provision that at least 35 percent of the budget of any joint venture cannot be spent on defence hardware except from the participating nations. The United States, which has not yet signed any such agreement, will have its contribution and exports — including such vital systems as F-35 fighter jets and Patriot missile defence systems — curbed in future European acquisition.

With this move, Canada is the first NATO country since Britain to formally join the EU defence industry program. The stakes are high: half of Canada's exports of military goods currently go to the United States. Access to the multibillion-dollar European procurement market opens a new window of economic opportunity for Canadian manufacturers — and a new universe of autonomy.

This is a historic agreement," Carney said at the signing ceremony. "Not only for Canada, but as a message to the world that democratic friends can stand firm, even when others are backing away.".

Trump pressure accelerates alignment

President Trump's constant belittling of NATO allies, trade wars, and recent comments that Canada might as well be the 51st US state have created alarm in Ottawa. Carney's anti-Trump stump speeches during the elections resonated, and Monday's agreement is seen as an attempt to reaffirm sovereignty and international standing.

Surveys show nearly half of Canadians now think of the symbolic idea of entering the European Union — an unattainable reality but one that shares Canada's new direction.

While NATO leaders convene in The Hague on Tuesday to discuss mounting defence budgets, the larger picture is this: Trump's America First policy is dismantling the older postwar system of alliances, and Washington's allies are no longer seeking leadership from Washington. They're seeking alternatives — with or without it.