When European Union leaders traveled to Montreal this month for the EU-Canada summit, they launched a grandly named “Alliance for the Future,” proposing to make Canada an “associate member” of the EU. A key part of the plan should be digital.
Europe has already negotiated five Digital Partnerships with like-minded democratic countries. Japan was the first, inking a digital deal in 2022. Since then, the EU has established agreements with South Korea, Singapore, Brazil, and Canada.
In Montreal, Canada and the EU agreed on a legal framework to protect data flows from localization barriers and decided that Canada could participate in the EU’s high-performance computing partnership. But the existing digital partnerships remain, fundamentally, non-binding talk shops.
The motivation behind strengthening the deals is clear: reduce reliance on the US and China. But reinforced digital partnerships with like-minded democracies must push back against strong protectionist instincts, while remaining open to new participants, including the US — perhaps through a revived transatlantic Trade and Technology Council.
Digital partner countries already benefit from free trade deals with Europe. No tariffs are imposed on goods, and no security risks are visible. Unlike with China, Europe’s trade with these digital partners is balanced; the EU runs a small surplus with most, including Singapore, Brazil, Japan, and Canada, driven by European strengths in services.
Europe, Canada, and its other digital partners are united in opposition to Russia’s illegal invasion of Ukraine. All have committed to boosting their defense spending. The digital partners’ values are aligned with the EU’s; they have adopted European-style privacy rules and often European-style antitrust enforcement.
Yet significant obstacles remain to deepening ties. Reinforced digital partnership must be compatible with World Trade Organization rules, which makes it hard to give special favors in bilateral deals.
Europe and Canada are not immune to economic nationalism, either. Europe’s ambitious digital sovereignty plans include a Made in Europe initiative that could threaten to exclude its digital partners from parts of the EU market. Its cybersecurity certification scheme could exclude Canadian, Japanese, and Korean companies from obtaining the highest possible safety rating. A newly proposed Cloud and AI Act might disadvantage or even exclude non-European companies from public service contracts.
Canada, for its part, has announced a new Made in Canada drive. This includes not only developing a standardized logo for local goods but also proposed “Buy-in-Canada” public procurement rules.
Political distractions could also derail progress. During her State of the Union address in September, Commission President Ursula von der Leyen called for Canada to become the EU’s first “associate member.” European governments, led by Germany, were surprised and, fearing the concept remained vague, vetoed the use of the term.
A more substantive challenge could be navigating Europe’s politics, increasingly dominated by nationalists. The upcoming French presidential election could bring the far-right National Front to power, while Alternative for Germany has won recent regional elections. Both parties are skeptical about Brussels’ power — and skeptical about free trade.
In Montreal, Canada and the EU gave themselves six months to hammer out details of the proposed “associate” membership. European Commission President von der Leyen said that Brussels intends to ensure that Canada is not disadvantaged by the proposed Made in Europe legislation. Canadian Prime Minister Mark Carney signaled similar assurances to European businesses.
Additional progress could be made on securing access to critical raw materials and energy, including exploring ways to jointly stockpile strategic resources. Legally binding commitments should be signed regarding data protection, infrastructure alignment, and public procurement. Cooperation could be strengthened on subsea cables and space projects to offer alternatives to Starlink satellite communications.
Above all, the partnership should cement mutual recognition. Canadian digital goods should be treated as equal to European digital goods and vice-versa. They should be eligible to receive the same high cybersecurity certifications and the same consideration for public procurement. Current exemptions for national security should be narrowed, if not eliminated.
The Alliance for the Future should extend beyond Europe and Canada. It should be expanded to include Japan, South Korea, and Europe’s other digital partners. A door should be held open for the US to join, too; the EU signed onto Pax Silica, after all. The transatlantic Trade and Technology Council could and should be revived.
Protectionism always fails. It reduces competition and raises prices. Europe and its democratic middle power partners have worked hard to build win-win trade and security relationships. They should continue on this path by strengthening their existing digital ties.
William Echikson is a non-resident Senior Fellow at the Center for European Policy Analysis and Editor of Bandwidth.
Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions expressed on Bandwidth are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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