Renew Europe, the centrist liberal political group in the European Parliament of the European Union (EU), formally proposed pushing a NATO-style trade alliance that would bind Europe with Korea, Japan, and Canada. The idea is for mid-sized economies to raise a defensive shield and build a multilateral collective deterrence system against the economic weaponization strategies led by the United States and China.
On the 18th (local time), Renew Europe, in a policy report released ahead of the European Council meeting that begins on the 19th, urged, "Let's conclude a Geoeconomic Deterrence Pact with Korea, Japan, and Canada to jointly respond when a particular country suffers unfair economic coercion." Geoeconomics, also called geoeconomic studies, is a field that analyzes power dynamics among nations that use the economy as a weapon.
This pact is rooted in Article 5 of the NATO charter on collective defense. It greatly expands the concept of deterrence—central to national security—from the military sphere into the economic realm, where front-line trade wars are unfolding. If the pact is concluded, the EU, Korea, Japan, and Canada will jointly manage supply chains in key strategic industries with high overseas dependence, such as semiconductors and critical minerals.
It also applies the NATO-style collective defense principle to the economy and trade, so that if one member state faces unfair tariffs or economic sanctions, all members mount a joint retaliation. If one country is hit with aggressive tariff impositions or economic pressure, the others would activate a coordinated retaliation package as a bloc. It carries the intent to move away from a post-factum dispute-settlement model centered on the World Trade Organization (WTO) and instead build a deterrent structure that preempts the pressure itself.
Valérie Hayer, head of Renew Europe, said, "We will pursue a new form of alliance in a time of geopolitical tension," and noted, "We must send a clear signal to great powers that unfair coercion against one nation will trigger a strong, joint response by the whole group."
The backdrop for such a bold proposal taking root in Europe is the trade pressure wielded by the Trump U.S. administration and China's leadership. The two powers are squeezing Europe's trading partners with tools such as tariffs, export controls, subsidies, and restrictions on market access.
By contrast, Korea, Japan, and Canada already maintain deep alignment with the EU on norms, advanced industries, and security. Canada has provisionally implemented the Comprehensive Economic and Trade Agreement (CETA) with the EU. Recently, it also formally began negotiations on a digital trade agreement. Canada Prime Minister Mark Carney appealed at this year's World Economic Forum (WEF) that "countries with much to lose must build a larger and stronger solidarity through genuine cooperation." Japan and the EU have been strengthening cooperation by successively bringing into force the Economic Partnership Agreement (EPA) and the Strategic Partnership Agreement (SPA).
Korea put its Free Trade Agreement (FTA) with the EU firmly in place as early as 2011. Recently, it reached a political conclusion on Digital Trade Agreement (DTA) talks, aligning with the EU on trade policy. Cooperation with the three countries is closer to a pragmatic approach that, rather than creating something from nothing, further reinforces the economic-security bulwark atop the already solidly built free-trade partnerships.
Still, a skeptical view prevails that there are high practical hurdles to realizing a trade alliance right away. Trade is heavily constrained by each country's complex legal systems and its domestic political landscape and interests. It is difficult to impose an absolute collective defense obligation backed by security, as NATO does.
By far the biggest stumbling block is relations with the United States. As of 2025, Canada depends on the U.S. market for 71.7% of its total goods exports. Japan and Korea also rely entirely on the United States for the core axis of security and deterrence. While the three countries may readily join efforts to counter China's trade retaliation, the political and economic expense would be steep to sign on to a system that opposes U.S.-origin tariff policies led by the Trump administration.
Experts said that if these countries pursue a trade alliance, they are more likely to strengthen solidarity step by step in areas that are practically beneficial, rather than moving straight to a fully fledged collective-retaliation treaty. It would be feasible to promptly build a tight early-warning system for semiconductor and critical mineral supply chains and to share export-control information transparently. Limited forms of cooperation—such as joint WTO complaints on specific items, safeguard discussions, and coordination on investment screening—could also be activated. While it will be difficult to immediately codify NATO-style automatic retaliation clauses, it would still be significant for the EU to signal that it is moving beyond being a mere rule taker between the United States and China and is aligning with allied nations.