Canada is looking to broker a deal to bring over a third of the world’s global trade under one roof.
Driving the news: Prime Minister Mark Carney is spearheading negotiations between the European Union and the CPTPP — a 12-nation Indo-Pacific trading bloc that includes Canada, Japan, and the U.K. — to form one of the world’s largest economic alliances.
Bypassing the U.S., the pact aims to link EU and CPTPP supply chains by aligning “rules of origin,” so that products made with parts from either bloc can qualify for low tariffs and move more easily across nearly 40 countries.
The talks follow Carney’s World Economic Forum speech, calling for the world's “middle powers” to band together in the face of economic coercion (a not-so-subtle jab at the U.S.).
Why it’s happening: Amid the Trump administration's tariff campaign, Canada and its allies have had to take a strength-in-numbers approach to trade. Ottawa has already reached new economic partnerships and trade deals with China, the UAE, and Indonesia, but this agreement would dwarf all of those in importance.
Earlier this month, India and the EU signed a landmark deal to form the world’s largest free-trade zone. That could serve as a blueprint for Canada in its ongoing negotiations with India.
Why it matters: With the U.S. increasingly treating market access as a weapon — using tariffs and trade threats as leverage — this alliance could anchor a new trade system for countries that still see the value in predictable, rules-based commerce.—LA