EU Proposes Canada Become the Bloc’s First ‘Associate Member’

(Bloomberg) -- European Commission President Ursula von der Leyen proposed Canada becoming the first associate member of the European Union.

She offered the invitation during her state of the union address in Strasbourg, France, Wednesday, with Canadian Prime Minister Mark Carney in attendance.

"In this new world, we must urgently re-imagine our partnerships and build global coalitions for our resilience and democracies," von der Leyen said. "I would like to work with you on opening the door for Canada being the first associate member of the European Union."

Carney warned earlier this year that the "rules-based international order" was effectively dead and has made repeated calls for so-called middle powers to band together to oppose the pressure tactics and intimidation of the world's dominant economies. Bloomberg reported earlier that the transatlantic allies were in talks to forge a new alliance to ensure their security.

Von der Leyen also discussed closer cooperation with Canada on manufacturing, tech, defense and energy, and cited the Arctic as a "flagship joint project."

Canada's priority list includes concluding the ratification of CETA, the EU-Canada Comprehensive Economic and Trade Agreement, an accord that was negotiated a decade ago but that still hasn't been formally approved by 10 European countries, according to people familiar with the discussions.

Outstanding issues also include ironing out differences over EU's carbon pricing tool on imported goods, its deforestation and pesticides rules.

Canada, unlike the UK, has been granted access to SAFE, the bloc's €150 billion ($173 billion) loan program for defense procurement.

Canada and the EU will be expected to make progress ahead of their summit in Montreal in October, at which they could sign a digital trade agreement that it's been in the works, said the people, who spoke on the condition of anonymity.

"Europe and Canada believe in democracy," von der Leyen will say. "That power does not belong to the strongest, the richest or the loudest."