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Canada and the European Union: Is a New Map of Global Economic Blocs Taking Shape?

By Prof. Khalid Wassef Al-Wazani

Professor of Economics and Public Policy

Mohammed Bin Rashid School of Government

The announcement by European Commission President Ursula von der Leyen opening the door for Canada to become the European Union’s first “associate member” may be far more than an initiative aimed at strengthening relations between two partners with extensive economic and political interests. It could be another signal that the very map of global economic blocs is beginning to change. Admittedly, “associate membership” does not yet exist as a formal legal status under the EU treaties, and Canada has not become an associate member. Yet the significance of the proposal lies in what it reveals about a broader shift in both European and Canadian thinking: in an era of renewed protectionism, countries are increasingly seeking larger and more secure economic spaces while reducing their dependence on any single partner.

From Canada’s perspective, the motivation is clear. The United States still accounts for around 72% of Canadian exports, leaving the Canadian economy heavily dependent on the US market. In a world of rising tariffs and growing trade tensions, diversifying economic partners is no longer merely a matter of trade policy; it has become part of economic security. Europe, meanwhile, may be viewing the issue from a broader strategic perspective. On one side stands the economic power of the United States; on another, the rise of China and the expansion of BRICS. At the same time, profound transformations are taking place in energy, technology, critical minerals and global supply chains. Bringing an advanced, resource-rich economy such as Canada closer to Europe’s economic and strategic space could therefore strengthen the EU’s ability to reposition itself within the emerging global order. The numbers are revealing. Trade in goods and services between the European Union and Canada reached around €130 billion in 2025. That may appear modest compared with approximately €1.77 trillion in EU-US trade in the same year. Yet the direction matters more than the current size. Since the implementation of the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union, bilateral trade has increased by around 80% compared with a decade ago.

This points to one of the most important lessons of economic integration, repeatedly demonstrated throughout economic history: integration does not merely redistribute existing trade; it can new trade as well. This lesson is particularly relevant to the Arab world, where arguments against deeper regional economic integration often cite the relatively modest level of intra-Arab trade as evidence that greater integration is neither necessary nor economically meaningful. The experience of other economic blocs suggests precisely the opposite: limited trade may be an argument for deeper integration, rather than against it.

But the issue goes well beyond Canada. If Europe succeeds in developing a new formula for “associate membership,” it could a different model for international economic relations: countries that do not politically join the European Union, but move significantly closer to its economic and strategic sphere in areas such as trade, technology, defence, energy, artificial intelligence and critical minerals.

We may therefore be entering a new phase in which economic blocs gradually move from the concept of geographic membership toward one of strategic partnership. If this transformation materializes, it would represent another manifestation of what may be described as “selective globalization”: a world in which globalization does not disappear, but reorganizes itself around networks of trusted partners, shared interests and economic security.

What is it for the Arab Region?!

Geographically and economically, the Arab world occupies an exceptional position between Europe, Asia and Africa. It maintains expanding relations with the European Union, while several Arab countries have simultaneously become members or partners of BRICS. The current transformations should therefore not be viewed as a confrontation that forces the region to choose between competing camps. Rather, they should be seen as an opportunity for strategic repositioning. What the Arab world needs is not to move from economic dependence on one side to dependence on another. Instead, it needs to build a network of interests that makes Arab economies indispensable partners to all sides—in energy, trade corridors, investment, technology, food security and emerging global value chains.

The new global economy will not be shaped by one country, nor is it likely to be governed by a single bloc. What we may be witnessing is a transition from a world dominated by major poles to a world of interconnected economic networks. And if Canada is now seeking to redefine its position between the United States and Europe, the question the Arab world should be asking is: Where do we want to position ourselves? The real opportunity is not merely to become part of the new global order after it has taken shape, but to participate in shaping it—as an active player, not merely a recipient.

Prof. Khalid W. Al Wazani