Mark Carney had his first foreign trip as prime minister yesterday and also what some are calling his first gaffe after calling Canada the ”most European of non-European countries.”
We're not sure we agree, but we get why he said it.
What happened: Carney visited both French President Emmanuel Macron in Paris and U.K. Prime Minister Keir Starmer and King Charles in London. The rationale for the trip was clear: to woo Canada’s two motherlands and strengthen trade ties as the U.S. trade war rages on.
Big picture: While Canadian trade with the two is strong, changes are needed to advance relations. For one, the deal governing Canada-EU trade is only provisionally applied as not every bloc member has signed on to it. And France has been a staunch opponent.
- Without full ratification, the deal is in limbo. Canada’s EU trade security is tenuous, as the deal can’t be updated and could, theoretically, still be repealed.
Meanwhile: Canada has been trying to get a trade deal done with the U.K. since Brexit but has run into repeated roadblocks. Last year, the U.K. called off negotiations over (what else) concerns with Canada’s protectionist dairy system. Reviving talks is a top priority for both.
Why it matters: The OECD just cut Canada’s GDP growth forecast this year from 1.5% to 0.7% due to U.S. tariffs, highlighting the country’s need to diversify trade. On the bright(?) side, other rich nations are also poised to take GDP hits and should be willing to deal.—QH