{"id":26977,"date":"2026-04-24T18:55:26","date_gmt":"2026-04-24T18:55:26","guid":{"rendered":"https:\/\/www.rbc.com\/en\/?post_type=rbc_tl&#038;p=26977"},"modified":"2026-04-24T18:55:28","modified_gmt":"2026-04-24T18:55:28","slug":"how-industrial-policy-is-bringing-canada-and-the-eu-closer","status":"publish","type":"rbc_tl","link":"https:\/\/www.rbc.com\/en\/thought-leadership\/the-trade-zone\/how-industrial-policy-is-bringing-canada-and-the-eu-closer\/","title":{"rendered":"Trade Zone: How industrial policy is bringing Canada and the EU closer"},"content":{"rendered":"\n<p><strong>Also in this edition: <\/strong>CUSMA\u2019s non-negotiables and a back-and-forth on provincial booze bans<\/p>\n\n\n\n<section class=\"wp-block-rbc-section-block  pos-rel\" style=\"border-radius:0px\">\n<div class=\"wp-block-rbc-section-inner-block  section-inner\" style=\"border-radius:0x\">\n<h2 class=\"wp-block-heading has-rbc-bright-blue-color has-text-color has-link-color wp-elements-147b5347654431c4daaa6f96621cbcf2\" id=\"h-taking-things-to-the-next-level\">Taking things to the next level<\/h2>\n\n\n\n<p><strong>The future of Canada-EU economic ties lies in industrial policy<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p>As Canada diversifies its trading relationships beyond the U.S., the European Union has emerged as a priority partner.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Increased diplomatic engagement has some even floating the idea of Canada joining the bloc.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>While that\u2019s unlikely for several reasons, what is relevant and actionable is the growing alignment between Canada and Europe on industrial policy, particularly in sectors where governments are directing capital, shaping supply chains, and setting the terms of competition.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<p><strong>From market access to industrial access<\/strong><\/p>\n\n\n\n<p>For the past decade, the Canada-EU relationship has been defined by the Comprehensive Economic and Trade Agreement (CETA) signed in 2016. Trade has grown materially in that time, but the agreement has not been frictionless in practice:<\/p>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p>Ratification remains incomplete and the agreement is yet to come into full effect, with several EU member states still yet to approve its investment chapter.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Regulatory barriers persist, particularly in agriculture, where Canadian exporters face constraints tied to EU sanitary rules, pesticide thresholds, and product standards.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>However, its provisional application has seen bilateral merchandise trade increase by over 77% from 2016 to $134 billion in 2025.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Now, across clean energy, advanced manufacturing, and defence, both Canada and the EU are directing public financing and procurement towards building domestic capacity and securing supply chains. That shift is changing how bilateral market access will be determined.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<p><strong>How access is being redefined<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p>The European Green Deal is directing capital into batteries, hydrogen, and industrial decarbonization, to concentrate production within the EU.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>The proposed \u201cMade in Europe\u201d Industrial Accelerator Act would tie access to subsidies and public procurement in strategic sectors to EU-based production or partner-country based reciprocity.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>This week, <a href=\"https:\/\/www.ft.com\/content\/bc021347-077d-47d0-84ef-5846da5ec3d9?syn-25a6b1a6=1\" data-dig-id=\"LP-26977-d7d6c3a9\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"Industry Minister M\u00e9lanie Joly\" class=\"rbc-link-format\">Industry Minister M\u00e9lanie Joly<\/a> said Canada will pursue negotiations with Brussels to gain access to the \u201cMade in Europe\u201d program with a reciprocal approach that aligned on industrial policy.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<p><strong>Defence is leading Canada-EU industrial collaboration<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p>Canada\u2019s participation in the EU\u2019s Security Action for Europe (SAFE) program provides the clearest example yet of how this shift is taking shape.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>SAFE will provide up to $244 billion in loans to EU member states to support defence projects and in December, Canada became the only non-member state to gain preferential access to the program.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<p>In practice, that means:<\/p>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p>Canadian firms can bid into EU-funded defence contracts on the same footing as European suppliers, competing directly for contracts rather than relying on subcontracting or local intermediaries.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Up to 80% of Canadian content is permitted in contracts, versus the 35% for other third countries, materially increasing the ability for Canadian manufacturing, engineering, and supply chains to anchor work domestically while still qualifying for EU procurement contracts.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p>Canada will provide an upfront \u20ac10 million contribution, and a 15% participation fee will apply to the value of Canadian content in contracts where European content makes up less than 65% of the value.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<p><strong>What to watch<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Whether Canada secures entry into \u201cMade in Europe\u201d: <\/strong>the government has opened the door, but EU openness to participation will require significant negotiation. The key question is whether Canada can convert political alignment into formal access across multiple sectors, not just defence, to participate in subsidy-backed projects.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>How SAFE translates from access to contracts:<\/strong> preferential terms are in place, but the signal to watch will be contract awards. Whether Canadian firms can secure meaningful roles in SAFE-funded projects and scale their exports across the continent, will define the scale and longevity of this partnership.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>The evolution of CETA:<\/strong> key sticking points remain for exporters, the agreement is only provisionally applied, regulatory alignment will be difficult to achieve, and negotiations are underway to reach an agreement on digital trade.<\/p>\n<\/li>\n<\/ul>\n\n\n\n<p>Taken together, these will determine whether Canada moves from being a preferred partner to a structural participant in Europe\u2019s buildout and capitalize in trade on the hundreds of billions the EU is deploying through its industrial policies.<\/p>\n\n\n\n<p><strong>&#8211;Thomas Ashcroft, Global Policy Issues Lead<\/strong><\/p>\n<\/div>\n<\/section>\n\n\n\n<section class=\"wp-block-rbc-section-block  pos-rel\" style=\"border-radius:0px\">\n<div class=\"wp-block-rbc-section-inner-block  section-inner\" style=\"border-radius:0x\">\n<h2 class=\"wp-block-heading has-rbc-bright-blue-color has-text-color has-link-color wp-elements-85f8c90675c442f0d22fe1ce5ce1c98a\" id=\"h-look-what-s-trending\">Look what&#8217;s trending<\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"534\" width=\"1024\" src=\"https:\/\/www.rbc.com\/en\/wp-content\/uploads\/sites\/4\/2026\/04\/TZ-4.24-Alcohol-Imports-Chart.png?quality=80&amp;w=1024\" alt=\"Canada's beer, wine and spirits imports from the U.S. are down 70%\" class=\"wp-image-26984\" srcset=\"https:\/\/www.rbc.com\/en\/wp-content\/uploads\/sites\/4\/2026\/04\/TZ-4.24-Alcohol-Imports-Chart.png 4000w, https:\/\/www.rbc.com\/en\/wp-content\/uploads\/sites\/4\/2026\/04\/TZ-4.24-Alcohol-Imports-Chart.png?resize=300,156 300w, https:\/\/www.rbc.com\/en\/wp-content\/uploads\/sites\/4\/2026\/04\/TZ-4.24-Alcohol-Imports-Chart.png?resize=768,400 768w, https:\/\/www.rbc.com\/en\/wp-content\/uploads\/sites\/4\/2026\/04\/TZ-4.24-Alcohol-Imports-Chart.png?resize=1024,534 1024w, https:\/\/www.rbc.com\/en\/wp-content\/uploads\/sites\/4\/2026\/04\/TZ-4.24-Alcohol-Imports-Chart.png?resize=1536,801 1536w, https:\/\/www.rbc.com\/en\/wp-content\/uploads\/sites\/4\/2026\/04\/TZ-4.24-Alcohol-Imports-Chart.png?resize=2048,1068 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<ul class=\"wp-block-rbc-list is-style-blue-disc\">\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Provincial bans on U.S. liquor could be resolved \u201cquickly\u201d said Mark Carney<\/strong>. That is, the <a href=\"https:\/\/www.theglobeandmail.com\/politics\/article-us-liquor-sales-usmca-talks-trade-mark-carney\/\" data-dig-id=\"LP-26977-72cc2c05\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"Prime Minister\" class=\"rbc-link-format\">Prime Minister<\/a> said, if the U.S. takes steps on the tariffs imposed on Canadian steel, aluminum and autos\u2014as well as Canadian forest products: \u201cThose are more than irritants,\u201d said Carney. \u201cThose are violations of our trade deal.\u201d The comments came a day after U.S. Trade Representative Jamieson Greer threatened \u201cenforcement action\u201d in response to Canadian provinces, including Ontario, B.C. and Quebec, keeping U.S liquor off store shelves.<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Ottawa said it won\u2019t back down on dairy supply management in trade talks. <\/strong>Dominic LeBlanc,the Minister responsible for Canada-U.S. Trade, also said Canada won\u2019t give in to U.S. demands on French-language labelling rules when CUSMA <a href=\"https:\/\/www.theglobeandmail.com\/business\/article-ottawa-has-red-lines-in-usmca-talks-but-deal-is-possible-leblanc-says\/\" data-dig-id=\"LP-26977-fc6f88dc\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"negotiations\" class=\"rbc-link-format\">negotiations<\/a> begin later this year. Both of those issues, as well as Canada\u2019s Online Streaming Act and its Buy Canadian policies, have been criticized by the Trump Administration. On whether tariffs of some kind will remain in place even if a deal is struck, LeBlanc said \u201cwe should be realistic\u2013they have not taken anybody to zero.\u201d<\/p>\n<\/li>\n\n\n\n<li class=\"wp-block-rbc-list-item\">\n<p><strong>Trump administration to begin refunding US$166 billion of tariffs\u2014plus interest.<\/strong>&nbsp;Two months after the Supreme Court struck down the \u201cLiberation Day\u201d tariffs, the U.S. government began accepting requests for <a href=\"https:\/\/www.bbc.com\/news\/articles\/c7vqgge5g8lo\" data-dig-id=\"LP-26977-4ae819e9\" data-dig-category=\"LP\" data-dig-action=\"link click\" data-dig-label=\"refunds\" class=\"rbc-link-format\">refunds<\/a> this week. The government had to build a new processing system for the 330,000 importers who paid International Emergency Economic Powers Act (IEEPA) duties.<\/p>\n<\/li>\n<\/ul>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"<p>Plus, CUSMA\u2019s non-negotiables and a back-and-forth on provincial booze bans<\/p>\n","protected":false},"author":89,"featured_media":26979,"parent":0,"menu_order":0,"template":"","meta":{"_acf_changed":false,"disable_focal_point":true,"featured_image_focal_point":{"x":0.5,"y":0.5},"advgb_blocks_editor_width":"","advgb_blocks_columns_visual_guide":"","footnotes":""},"rbc_tl_category":[207],"rbc_tl_tag":[],"class_list":["post-26977","rbc_tl","type-rbc_tl","status-publish","has-post-thumbnail","hentry","rbc_tl_category-the-trade-zone"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.2 (Yoast SEO v27.2) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Trade Zone: How industrial policy is 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