So we are all Europeans now?

Ursula von der Leyen’s invitation to Canada to become the EU’s first “trusted associate” looks, at first glance, like routine Brussels diplomacy — a not-so-subtle signal to Trump’s White House and some neat positioning alongside a successful centrist leader at a time when European voters are increasingly flirting with right-wing populism. But for businesses, it raises a much sharper question: where does Europe’s economic perimeter actually end?

Details are scarce. But the proposed relationship, unveiled during Mark Carney’s visit to Europe, is intended to go well beyond the existing EU-Canada trade deal; an “Alliance for the Future” spanning manufacturing, technology, energy, critical minerals and defence. The status doesn’t yet exist in EU treaties, but the direction of travel is clear.

For decades, the EU has worked in binary: you’re either inside the club, paying the membership fees, and accepting the rights and obligations, or you’re a third country trading under an agreement. “Associate” status suggests something more flexible, and that flexibility matters as Brussels pushes industrial policies designed to keep production, technology and supply chains inside Europe.

Consider the EU’s emerging “Made in Europe” approach, folded into the proposed Industrial Accelerator Act. Manufacturing has slipped to around 14% of EU GDP; Brussels wants it back near 20% by 2035, using faster permitting, tighter rules on foreign investment, and stronger preference for European production in public spending. None of this is surprising. The US and China have run aggressive industrial policy for years, and Europe is catching up.

The political logic is simple: if Europe wants industrial resilience, public money shouldn’t subsidise production elsewhere. But business is rarely that tidy. A German manufacturer may depend on British components. A French energy company may rely on Canadian critical minerals. A Dutch tech firm may have suppliers across the UK, Canada and the US. Modern supply chains don’t stop at the EU’s border.

That’s Brussels’ practical problem. Define “European” as EU-only production, and you exclude firms deeply embedded in European supply chains, raising costs and denting competitiveness. Define it too loosely, and the whole point of an industrial strategy dissolves.

This is why the Canadian idea matters. An associate status could let trusted partners go deeper into the European economic relationship without full membership rights – a middle tier between “in” and “out.”

For European businesses, that could mean a wider economic circle forming around the Single Market. It wouldn’t necessarily bring tariff-free access to everything, nor erase regulatory differences. But it could open the door for companies in partner countries to plug into European industrial programmes, supply chains and strategic projects, while giving EU firms more certainty about relying on those partners. It could cut both ways too: European companies investing in Canada might gain a more predictable framework for cooperation in energy, minerals, manufacturing and defence.

For businesses outside the EU, the signal is arguably more interesting still. Brussels may be shifting toward a model where trust, alignment and strategic importance count alongside geography. That doesn’t mean every country gets equal treatment, or that an open “outer Single Market” is coming. The more likely reality is conditional: closer access in specific sectors in exchange for commitments on regulation, security, supply chains and standards. Still, that’s a real shift in mindset.

This has clear implications for the UK. Brexit was built on the idea that Britain could trade and cooperate with Europe without being bound to its political structures. Until now, the debate has been stuck between two poles: membership or third-country status. Canada may be handing Brussels a reason to think in between.

None of this means Britain should expect a Canadian-style deal, or that Brexit is being quietly reversed. Quite the opposite: an associate model could formalise the idea that a country can stay outside the EU while aligning more closely with parts of its economic and strategic architecture. The price would be real – regulatory alignment, supply-chain cooperation, carbon and environmental standards, possibly commitments in strategic industries. But for many businesses, that may still be worth it.

The bigger point is that “European” and “EU” have never been quite the same thing, even though most of us muddle them constantly — just ask Eurovision, where Australia and Israel compete as Europeans without anyone blinking. Brussels, though, doesn’t have that luxury. If “Made in Europe” is going to mean anything as an industrial strategy, the EU needs a definition precise enough to direct money and preference toward the right firms. But it’s also discovering the reverse: that a looser, more expansive version of “European” may be exactly what makes that strategy workable in practice. Canada’s invitation might be the first real test of where that line gets drawn.