Saturday, October 31, 2026
The news that moves freight
Ocean Oct 31, 2026 · 7 min read

Canada and the EU launch an “Alliance for the Future”, with ports in it but no tariffs

Canada’s new EU alliance points cargo east, but CETA still sets the rules

On 30 October Canada and the European Union closed their 21st summit, held in Montreal, with a joint statement called “Canada and the European Union Building Together an Alliance for the Future”.

For freight, the key paragraph is about ports. The two sides say they will “improve the efficiency, resilience and security of maritime and multimodal supply chains”, “strengthen links between Canadian and European ports”, and “develop gateway-to-gateway cooperation connecting Canadian Atlantic, Pacific and Arctic routes” with Europe. “Multimodal” means a shipment that moves by more than one mode, such as ship, rail and truck, under one plan.

Our view: this is the clearest sign yet that Ottawa is moving trade policy away from the US. But it does not change what any shipment pays today. The statement contains no tariff rates, no quotas and no changes to customs procedures. It does not mention steel. Shippers who want to move Canadian exports from US-bound lanes to Europe should plan around the deal that already exists, CETA, not around an alliance whose terms are still to be written.

What was actually agreed

Some parts are finished. The statement says the two sides “have concluded substantive negotiations on a Digital Trade Agreement (DTA) that will complement CETA”. The DTA covers cross-border data flows. That matters to anyone who sends shipment data, commercial invoices or customs filings between the two sides. They have also “concluded negotiations on a second-generation Competition Agreement”. Canada and the European Investment Bank have concluded talks on an investment agreement. A working arrangement between Frontex, the EU border agency, and the Canada Border Services Agency (CBSA) has been agreed.

Other parts are intentions. The two sides “will establish a business council to engage and bring together companies on both sides.” They will build on CETA “to create a common prosperity and economic security space” and “upgrade our trade partnership”. They will run “a joint long-term feasibility study on Liquified Natural Gas (LNG) exports to Europe”. On critical raw materials, they will explore supply-security tools, “including stockpiling of critical resources to insulate from market fluctuations and geopolitical impacts”. The Arctic gets its own line on deeper cooperation.

The headline idea is still open. The two sides aim to “define by the 2027 EU-Canada Summit the concept of an ever-closer association of Canada to the EU”, “short of full membership itself”.

The membership word that is not in the text

Mark Carney presented the summit as more than a trade update. TIME reports him saying the aim is “the deepest possible partnership, short of accession, because of our geography”. He added: “In the coming months, we will determine the full substance, scale, and scope of this new form of membership.” He also said: “This new alliance is not a marketing exercise. The name doesn’t matter.”

Ursula von der Leyen, the European Commission president, was more careful. “Canada cannot become a full-fledged member of the E.U. because of geography,” she said, according to TIME. She also said: “This is why we are discussing the idea of Canada becoming the first associate member of the European Union.”

“Discussing” is the right word. TIME notes that “associate” does not appear in the final statement. The statement uses “association” instead, twice. Some EU capitals were caught off guard. Germany’s ambassador to Canada, Matthias Luttenberg, told CTV, as reported by TIME: “we have been a little surprised by the announcement, which doesn’t mean that we cannot agree on it.” The Commission’s chief spokesperson, Paula Pinho, said “we will continue to work with the European Parliament, member states, and the Canadians to achieve our common objectives.”

Our reading: the 27 member states have not agreed what “association” means. Until they do, there is nothing for a customs broker to apply. TIME reports that Carney plans to attend a meeting of European leaders in June to conclude negotiations. That is the earliest point at which terms could appear.

Why Ottawa is pushing now

The US is the reason. TIME reports that the US accounted for 72.5% of Canadian merchandise exports in 2025. That is the dependence Ottawa wants to reduce. TIME also reports that US-Canada talks collapsed in August. After that, Trump threatened to raise US tariffs on all cars, trucks and automotive parts from Canada to 50% from 1 January 2027.

Carney is not rushing to fix that. TIME reports he is playing down any suggestion of a deal before the US midterms on 3 November. “We will have [a deal] when it suits Canadians,” he said. Trump, for his part, called the associate-membership proposal “laughable”. He threatened to “put very serious tariffs or stop trading with Europe on many things”, said Canada “is learning their lesson”, and said the dispute would be “settled pretty soon”, according to TIME.

The EU trade is already large, but it is not close to the US trade. Eurostat figures reported by Cyprus Mail on 14 October put EU-Canada goods trade at €81.80 billion in 2025. That splits into €48.80 billion of EU exports to Canada and €33.00 billion of EU imports from Canada. Total trade has grown from €54.20 billion in 2018, about 6.1% a year on average. The EU’s biggest imports from Canada are ores, slag and ash (€4.00 billion), machinery (€3.80 billion) and mineral fuels (€3.10 billion). Those are bulk and project cargoes more than boxes. That fits the stockpiling and LNG lines in the statement.

The CETA problem nobody at the summit fixed

CETA has been in provisional force since 2017. It already removes most tariffs between Canada and the EU. The problem is that many shippers do not use it.

A Global Affairs Canada study published in July 2026 looks at “preference utilization”, the share of eligible trade that actually claims the CETA tariff rate. For Canadian exports to France, the rate was 70.5% in 2021. It fell to 49.2% in 2024, below what the study calls a 50% alert threshold. The study links much of that fall to one product line. It also finds that Canadian consumer goods utilization fell from over 70% in 2019 to 36.7% in 2023.

Two findings matter directly to forwarders. First, routing. The study finds that more trade moving through third countries, such as the US, goes with fewer CETA claims. A 10-point rise in indirect transit is linked to a drop of about 5 points in utilization for French exports. CETA’s direct transport rule can cost a shipment its preference if it is not handled properly in transit. For French exports, the share of indirect trade rose from about 20% in 2018 to 26% in 2024. Second, mode. For Canadian exports, air freight is linked to an 11.5-point drop in utilization, in the study’s weighted model. The study also finds that complex rules of origin weigh on Canadian exporters.

Our view: this is where the real value lies, and the summit did not address it. Canadian cargo already moves to Europe through US ports and US air hubs, and a lot of eligible trade never claims its CETA rate. The alliance cannot turn that around faster than better paperwork can. Every Canadian shipment that pays the full EU duty when it could have paid zero is money that no new treaty is needed to recover.

What forwarders should do with this

First, audit CETA claims. For Canadian exporters moving goods to Europe, check whether origin statements are being made and whether the goods qualify. The study’s 49.2% figure suggests many are not.

Second, look again at routing. Cargo moving straight from Halifax, Saint John, Montreal or Vancouver to an EU port is easier to defend under the direct transport rule than cargo moved through a US port. The “gateway-to-gateway” pledge points the same way, though it carries no money or timetable yet. Arctic routes are named, but they remain a seasonal option for most cargo.

Third, watch the data deal. A signed Digital Trade Agreement could make cross-border data rules more certain for shipment and customs data. Until it is signed and in force, nothing changes for current filings.

Fourth, be honest with customers who ask about leaving US lanes for Europe. The 50% US auto tariff threat is dated 1 January 2027. The EU association has no terms and a 2027 target. Cars and parts built for North American supply chains cannot be sent to Europe in two months. Bulk minerals, energy and some machinery may move faster.

Our call

We expect no new tariff cuts, quotas or customs-procedure changes to come out of this alliance before Carney’s planned June 2027 meeting with European leaders. The first concrete deliverable that touches freight will be the Digital Trade Agreement moving to signature. The “association” will not have defined trade terms before the 2027 summit. In the meantime, the gains for Canadian shippers going to Europe will come from using CETA properly and routing directly, not from anything announced in Montreal.

Sources