Ambitious politicians don’t yearn to sort out the tedious details of domestic politics, with all the attendant squabbling over limited budgets and official favour. The great public egos are drawn by the siren song of diplomacy. Swanning through state dinners and official receptions, racing through capital cities in motorcades, making small talk with crowned heads of state offer intoxicating proof that one has arrived in the most exclusive of clubs. International affairs also offer an irresistible opportunity to distract tiresome constituents from internal failures, and perhaps focus their attention on useful adversaries abroad. At an extreme, this can lead to disaster. General Galtieri deflected Argentine anger over economic hardship with the seizure of the Falklands from the UK. The tottering Greek military junta backed a coup in pursuit of Enosis, union of Cyprus with the Greek motherland. That both of these cases resulted in regime collapse hasn’t proved a sufficiently salutary lesson. The occupation of Crimea gained Putin wild acclaim at home, but led him to plot his ascension to latter-day Czar with the complete conquest of Ukraine.
International opportunism retains its attractions even among the polite and inoffensive. Mark Carney won election by distracting Canadians from the serial failures of his Liberal predecessor with his “elbows up” campaign against Donald Trump. Rather than use his mandate to tackle the problems facing his voters – slow growth, stagnant wages, unaffordable housing and uncontrolled immigration – Carney preferred to take his place on the international stage as an icon of liberal internationalism. Clearly his term as governor of the Bank of England only whetted his appetite for even greater standing in world affairs. Why waste one’s time repairing national health care, facing down Albertan separatists or (God help you) appeasing the Québécois, when you could bask in the acclaim of your Davos compadres?
Carney found his soulmate in European Commission President Ursula von der Leyen, who also prefers to avoid the tedium of internal EU politics with foreign policy adventures. Elbowing aside her putative foreign minister Kaja Kallas, and leaving tough budget negotiations to her hapless counterpart at the European Council António Costa, Queen Ursula invoked her royal privilege and magicked up a new status for Carney’s Canada: Associate Member of the EU. No one is exactly sure what an Associate Member is. It is not a candidate for membership, nor is it a part of the customs union or the European Economic Area, but it’s certainly something far grander than the Comprehensive Economic and Trade Agreement (CETA) signed in 2016. Associate membership could be a model for Ukraine, which is also a major agricultural exporter and thus must be held at a certain arm’s length indefinitely lest French farmers riot in the streets.
That the CETA remains provisionally applied and unratified by 10 EU member states reveals the emptiness of the gesture. Von der Leyen has no powers under the Lisbon Treaty to bestow any new status on other countries. Whatever “associate membership” is, it is granted only by unanimous vote in the Council of the European Union, much like membership in the European Economic Area (EEA). It is not a bauble distributed at the whim of the Commission President. Yet this foray out into the world has usefully distracted Europe’s Great and Good from her failures. The Single Market remains woefully incomplete, beset by different national standards and regulations that cost the EU several percentage points in economic growth every year. The euro is still unsupported by a completed banking union, common deposit insurance or a unified capital market that could direct the collective savings of Europeans toward productive investment. Von der Leyen’s Commission remains dedicated to the proposition that it can regulate its way to prosperity, but has succeeded only in raising energy prices and driving industrial capital to China and the United States. Making Europe uninvestable through overregulation and Net Zero mandates is ruining the economic prospects of young Europeans.
After the billing and cooing is over, what does the new partnership between Carney and von der Leyen have to offer their respective citizens? The official announcement suggested greater cooperation in defence, artificial intelligence and the provision of energy. Canada, which once earned its own invasion beach at Normandy, has only the ghost of a military these days and can contribute little to Europe’s efforts to deter Russia. In any case, Canada and the major European powers are guided by NATO’s defence planning, and not any EU attempts to supplant it. Carney clearly hopes to claim a share of Europe’s defence spending bonanza as a preferred partner, but has far less expertise and capacity to offer than the UK, which despite these attributes has yet to earn equal access to the EU’s common defence funds.
Neither Canada nor the EU has sired artificial intelligence companies capable of challenging China or the United States. Cooperation between also-rans is not likely to benefit either. Given their governing tendencies, they are far more likely to cooperate in suffocating their nascent AI industries through overregulation.
Canada does have immense energy resources, but lacks the infrastructure to supply much of it to Europe. Canadian pipelines run west to the Pacific in the service of Asian markets, or east to Ontario, by way of the United States. Any help solving Europe’s energy problems will require the construction of oil and gas loading facilities on Canada’s Atlantic coast, in violation of the environmental orthodoxies espoused by Carney’s Liberal Party. Canada’s oil resources are concentrated in the Alberta oil sands, which are the dirtiest and most carbon intensive of fossil fuels. Large-scale imports of Canadian oil will require a significant relaxation if not the outright abandonment of the EU Carbon Border Adjustment Mechanism.
Carney is reluctant to reveal his country’s most attractive quality to the EU: a potential net payer into EU coffers. Council President Costa is on a frantic tour of EU capitals, desperate to broker a budget agreement before wild-eyed populists marshal more opposition to the EU. The net payers led by Germany are determined to cut the proposed budget dramatically, while the net recipients want more support from Brussels, provided someone else pays for it. Costa hoped to square the circle with ambitious plans for new EU taxes, or “own resources”, but these have been whittled down to nugatory proposals for levies on vapes and electronic waste. A new net payer would help Costa bridge the gap between payers and takers. The accession of Iceland offered hopes of a wealthy new member, but was scuppered by rural voters. Canada is now being sized up as an attractive mark willing to shell out for the immense honour of a formal association with Europe.
If Canada can be lured into a bespoke arrangement, complete with new sinecures in Brussels for civil servants desperate to escape Ottawa, she will pay at least as much as Norway, which remits over half a billion dollars a year for its EEA status. Good for EU finances, but what will Canada get in exchange? Relaxed work rules and membership in the Erasmus study programme will benefit young Canadians, but visa reciprocity will also lure ambitious Europeans toward greater opportunities in North America. Industrial tariffs are already minimal under the CETA agreement, and there is no chance the EU will open the Single Market to increased Canadian agricultural imports. Carney is notably vague on the material advantages of formal association with the EU, and hopes instead to enlist his people in a great crusade against the enemies of the liberal international order. The prospect of becoming honorary Europeans in contrast to those brutish Americans appeals to his core constituents in the tonier precincts of Toronto and Vancouver. They are keen to transform the maple leaf flag into a symbol of resistance to that awful man in the White House.
None of this will offset the risks of alienating Canada’s biggest market, the United States. The prosperity of 40 million Canadians is dependent on the trade surplus they run with 340 million American consumers. Canadian industry is comprehensively integrated into the American market in everything from car parts to advertising. The EU cannot offer anything close to a replacement should the US retaliate against any Canadian deal with Europe. Carney walked away from a good trade offer from Washington in a fit of performative hubris, preferring to risk the economic well-being of his people for the accolades of his European peers.
Given her fraught relations with the White House, Ursula von der Leyen sees little downside in her flirtation with Carney. She is empire-building, not in the old way of territorial conquest, but in the post-modern sense of attaining greater elite regard. The average Commission bureaucrat hopes to make the EU into a workable federal state, but von der Leyen sees it as a citadel of self-regarding virtue for affluent Western elites besieged by angry populists. Granting titles of privilege to loyal servants like Carney elevates her office to the status of a royal court in the realm of the global elect, an objective far more important than the tawdry material needs of factory workers in Duisburg or coal miners in Silesia.
Her neglect of the sources of Europe’s prosperity and her failure to mobilise the resources of the Commission in their service will expose her true achievement: an empire built on sand.
