Michael Taube: Mark Carney leans European, but needs to buy American again

Prime Minister Mark Carney is seemingly in the process of moving Canada away from the United States — our longtime friend, ally and trading partner — and thrusting us into the waiting arms of the European Union. This is where he believes Canada, which he describes as the “most European of non-European countries,” truly belongs. Yet his narrow-sighted approach to the U.S. and EU could have devastating consequences.

There’s nothing wrong with the general concept of diversifying Canadian trade and strengthening our alliances and partnerships with European countries. Liberal and Conservative prime ministers have worked to build strategic relationships and cast a wider net in the global marketplace. It’s hard to argue against their logic.

Former prime minister Stephen Harper, for example, supported diversifying Canada’s trade with India, Asia and other parts of the world, which helped decrease our economic dependence on the U.S. “Look, we have to diversify our trade and continue to,” he said in a 2011 interview with Bloomberg.

“But we’re not going to pretend that we’re not going to be closely tied to the American economy. That’s frankly one of the great assets, most of the time, for the Canadian economy. We want to work with the (former U.S. president Barack) Obama administration, bilaterally and through the G20, to do what we can to move the continent forward.”

When it came to security matters, Harper was clear in his position that Canada and the U.S. must continue to work together. “We’re working with the Obama administration on what we call ‘perimeter and security measures,’ to enhance our integration, enhance our access, in a period of heightened security,” he said.

If Carney had done something along those lines with the EU, you could nitpick certain details but understand the basic strategy of diversification. But that’s not what the PM is doing. Rather, he’s moving us heavily into a relationship with the EU at the expense of repairing Canada’s historic relationship with the U.S. No previous Canadian prime minister, be it a Liberal or Conservative, has ever seriously considered taking this highly controversial step. It’s an enormous error in judgment on Carney’s part.

To begin with, the security and defence partnership between Canada and the EU will “establish and implement a tailor-made, mutually beneficial partnership that will frame bilateral dialogue and co-operation across the full security and defence spectrum.”

It will also “promote multilateral dialogue and co-operation with like-minded countries in relevant areas of security and defence where considered mutually beneficial.” Some of the matters mentioned in the agreement include support to Ukraine, peacekeeping operations, military mobility, maritime security, sharing information on defence initiatives and cybersecurity.

And it doesn’t stop there. Businesses will be encouraged to “grow and diversify markets by fully and effectively implementing” the Canada-European Union Comprehensive Economic and Trade Agreement. The parties also agreed to work towards a “digital trade agreement,” “identify trends and risks of mutual concern that could affect our economic security,” “reduce barriers and strengthen agriculture and agrifood trade” and focus on shared energy needs.

What about the future of Canada-U.S. relations? While there have been issues between our two countries due to U.S. President Donald Trump’s tariffs and leadership style, it’s vitally important for Carney to rebuild ties with the U.S. There have been political, economic and military disagreements between Canada and the U.S. before. We fought one another during the War of 1812. Nevertheless, we always found ways to agree to disagree and move forward like good friends and allies do.

Things looked promising at one point. Carney said earlier this month that his government was “in intensive negotiations with the Americans” to end the tariffs on aluminum and steel that chilled relations between our two countries. Carney and Trump also agreed to work towards an economic and security pact within the next 30 days during last week’s G7 summit in Kananaskis, Alta.

Alas, Carney’s determined tone has noticeably shifted. He’s now hemming and hawing about the path forward. “We’ll do what’s right for Canada,” he told reporters in Brussels. “We’re working hard to get a deal, but we’ll only accept the right deal with the United States. The right deal is possible, but nothing’s assured.”

Trump then announced on Friday through his Truth Social account that he was “terminating ALL discussions on Trade with Canada, effective immediately.” Why? This was due to Canada’s decision to introduce a “Digital Services Tax on our American Technology Companies.” Trump believed the Carney Liberal government was “obviously copying the European Union” with this tax, and felt it was a “direct and blatant attack” on the U.S.

No one is suggesting that Carney is obligated to bend to Trump’s every whim and desire during these crucial negotiations. At the same time, this is hardly the sort of descriptive language and rhetorical tone he should be using in public before the July 21 deadline.

If there have been issues between the two sides, fine. All Carney had to do was take a more neutral position for the bulk of the 30-day process and crescendo accordingly. This would have shown that he recognized the importance of preserving Canada-U.S. relations and was taking things seriously. It would have been hard to argue against such logic.

It appears that Carney’s infatuation with the EU has further strained our friendship with the U.S. for the foreseeable future. While some will claim that Trump is the main reason, it’s a false narrative. He’ll be out of office in a number of years, as will Carney. The devastating political and economic effects of a fractured Canada-U.S. relationship will last long past then.