EU Opens Door for Canada to Become First Associate Member

European Commission President Ursula von der Leyen on Wednesday said the European Union is opening the door for Canada to become the first associate member of the 27-nation bloc.

The announcement marks a significant change in EU policy and signals a major deepening of ties between Brussels and Ottawa.

Speaking in her annual state of the European Union address in Strasbourg, France, the EU chief said the bloc wants to bring the relationship with Canada "to the highest level possible."

"And, dear Mark, I said we must urgently reimagine our partnerships so I would like to work with you on opening the door for Canada to being the first associate member of the European Union," Von der Leyen said.

Carney, who was in attendance for the speech, had previously said Ottawa was keen to pursue a "unique security and economic alliance" with Europe, but not full membership.

Canada is currently locked in a bitter trade war with the U.S. and has pledged to match President Donald Trump's tariffs dollar for dollar.

The EU has previously been reluctant to entertain the prospect of flexible membership categories, notably when German Chancellor Friedrich Merz pushed for the EU to consider associate membership for Ukraine earlier in the year.

Asked whether Von der Leyen's push to embrace Canada as the EU's first associate member was history in the making, Berenberg chief economist Holger Schmieding said: "I think this is a big step, indeed."

"Europe is trying to openly form new partnerships or deepen partnerships with all countries in the world that are sort of like-minded," Schmieding told CNBC's "Squawk Box Europe" on Wednesday.

"It is not necessarily against the U.S., but it is clearly in favor of making us less dependent on the U.S. and less dependent on China, and that deeper partnership with other countries, like-minded democracies, is actually something we see in the economic re-arm," he added.