⁠Carney Signs New Trade and Defence Partnership With Türkiye as Trump Tariffs Push Canada Beyond the U.S.

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Prime Minister Mark Carney’s first dedicated bilateral visit to Türkiye has produced a relationship Ottawa once would have struggled to imagine. In Ankara on October 22, Carney and President Recep Tayyip Erdoğan launched a Canada–Türkiye Strategic Partnership covering trade and investment, energy, defence and security, and people-to-people ties, backed by a three-year action plan. The timing is as important as the agreement itself. Canada is trying to reduce its dependence on the United States as President Donald Trump’s tariffs reshape cross-border commerce and force Ottawa to look harder at markets, capital and security partners elsewhere. The shift does not mean Canada is replacing the U.S., nor has Canada signed a free-trade agreement with Türkiye yet. But it does show how quickly Ottawa is building alternatives when old assumptions about North American trade no longer feel secure.

A Historic Visit Turns a Cautious Relationship Into a Strategic One

Carney’s visit was the first bilateral trip to Türkiye by a Canadian prime minister, a milestone in a diplomatic relationship that dates back more than eight decades. The two countries are already NATO allies and G20 members, but their relationship has often been narrower and more cautious than those labels suggest. The new Strategic Partnership is designed to change that. Its three-year action plan is organized around four pillars: trade, investment and innovation; energy and climate cooperation; defence and security; and government-to-government and people-to-people ties.

The structure matters because it creates recurring machinery rather than a one-day announcement. Canada and Türkiye agreed to establish an annual strategic dialogue, continue annual Joint Economic and Trade Committee meetings, maintain political-military and counter-terrorism consultations, and have their foreign ministers oversee implementation. Erdoğan has also been invited to Canada for a future visit. For businesses and officials, that means the relationship now has a calendar, designated channels and measurable areas of work — the kind of institutional framework that can keep projects moving after the leaders leave the room.

The Trade Goal Is Much Bigger Than Today’s Numbers

The commercial relationship is growing, but it still starts from a modest base. Two-way merchandise trade reached about C$4.3 billion in 2025, including roughly C$1.1 billion in Canadian exports to Türkiye and C$3.2 billion in imports. Ottawa says bilateral trade has risen by nearly 50% over five years. Canadian direct investment in Türkiye also climbed sharply, reaching about C$3.3 billion in 2025 compared with C$1 billion in 2022, while Turkish direct investment in Canada stood at about C$233 million.

Ankara wants the numbers much higher. Erdoğan said the two countries hope to raise annual trade first to US$5 billion and eventually to US$10 billion, though he did not set a deadline. The mix already shows why both sides see room to grow. Canada sells products such as lentils, aircraft-related goods and electronics into the Turkish market, while imports include medical devices, aircraft engines, vessels and jewellery. For Ottawa, Türkiye is not yet a substitute for the U.S.; it is a test of whether dozens of smaller relationships can collectively make Canada less exposed to one market.

Free Trade Talks Are Moving, but No FTA Has Been Signed Yet

The most important trade element is still unfinished: Canada and Türkiye are negotiating a free-trade agreement rather than celebrating a completed one. The two governments announced the launch of negotiations in July, Canada held public consultations from July 31 to September 14, and Ottawa tabled its formal notice of intent in Parliament on September 21. The government’s published objectives include reducing tariffs and non-tariff barriers, improving access to Turkish supply chains and creating more predictable rules for services, investment and digital trade, while preserving Canada’s supply-management system.

The new partnership adds practical pieces around those negotiations. Carney and Erdoğan signed a newly expanded air-transport agreement intended to improve connectivity for trade, tourism and business. They also welcomed deeper cooperation between Export Development Canada and Türk Eximbank to help companies pursue projects in third countries, and Carney announced a Canadian trade mission to Türkiye in 2027. These measures matter because free-trade deals only create value when firms can finance shipments, reach customers, move executives and build distribution networks. The diplomatic agreement is therefore trying to build the commercial plumbing before the FTA is finished.

Defence Cooperation Marks a Major Reversal After Years of Friction

Defence cooperation represents one of the sharpest reversals in the relationship. In 2021, Canada cancelled 29 export permits for military goods and technology after a government review found credible evidence that Canadian sensors on Turkish-made drones had been used in the Nagorno-Karabakh conflict in ways inconsistent with Canadian policy and Turkish end-use assurances. The dispute became a symbol of the mistrust between the two NATO allies. In January 2024, Ottawa removed its presumptive-denial policy and returned to case-by-case reviews, while requiring stronger assurances when Turkish military or government entities are the final users.

Now the two governments are moving in the opposite direction. The Strategic Partnership includes a Defence Sector Partnerships memorandum between Global Affairs Canada and Türkiye’s defence-industry authorities, with the goal of connecting companies and expanding industrial cooperation. Türkiye is also supporting the Canada-led effort to establish a Defence, Security and Resilience Bank, designed to expand financing for allied defence production and potentially begin operations as early as 2027. The story is not simply about selling weapons. It is about rebuilding trust, financing production and finding areas where two sizable NATO defence industries can work together.

Nuclear Power, LNG and Critical Minerals Could Produce the Biggest Deals

Energy may produce some of the biggest-ticket opportunities. The three-year plan calls for deeper cooperation in liquefied natural gas, civil nuclear energy, renewable power, clean technologies, critical minerals and energy-infrastructure resilience. That builds on earlier discussions between Canadian and Turkish energy ministers about nuclear power, mineral processing and LNG. For Canada, the attraction is substantial: Türkiye is a major industrial economy positioned between Europe, the Black Sea, the Caucasus and the Middle East, while Canada is trying to sell more energy, technology and resource expertise into non-U.S. markets.

The most closely watched possibility involves nuclear power. Türkiye plans additional nuclear generating capacity, and Canadian engineering firm AtkinsRéalis, which owns the CANDU technology business, has held talks over potential involvement in future Turkish reactors. Reuters reported that a working group was expected to examine the feasibility of a Canadian CANDU bid for a planned Black Sea project. No reactor contract has been awarded to Canada, so the opportunity remains just that — an opportunity. Still, nuclear projects can shape commercial relationships for decades, which helps explain why energy cooperation sits at the centre of a partnership meant to last well beyond the current tariff dispute.

Trump’s Tariff Fight Is Accelerating Canada’s Search for Alternatives

The U.S. trade conflict is the backdrop Ottawa cannot ignore. In August, the United States moved to impose 50% tariffs on roughly C$27.6 billion of Canadian goods, and Canada subsequently announced matching counter-tariffs on an equivalent value of U.S. imports. Those measures arrived amid continuing trade pressure on strategic Canadian industries, including steel, aluminum and autos. Carney has repeatedly argued that Canada must respond by strengthening itself at home while diversifying abroad, and his government has set a goal of doubling exports to non-U.S. markets over the next decade.

The numbers show both the urgency and the difficulty. In 2025, the United States still absorbed 72.5% of Canadian merchandise exports, even though that was the lowest share since the early 1980s. By August 2026, non-U.S. markets accounted for about 30.2% of Canadian goods exports that month after reaching an even higher share in July. Türkiye therefore fits into a broader pattern rather than standing alone. Ottawa is pursuing multiple trade, energy and security partnerships because no single country can absorb enough Canadian output to offset the scale of the U.S. market. Diversification is a portfolio strategy, not a one-for-one replacement.

Human Rights Remain an Uncomfortable Test for the New Partnership

The rapprochement also carries a political cost that the economic agreements cannot erase. Amnesty International urged Carney to raise concerns about what it describes as a worsening human-rights crisis in Türkiye, including pressure on opposition politicians, journalists, civil-society groups and LGBTQ+ advocates. The organization said at least 117 LGBTQ+ people had been detained since a nationwide operation began on September 12 and that at least 83 had remained in pre-trial detention at the time of its October 21 statement. Associated Press reported that Carney did not publicly raise those concerns during his appearance with Erdoğan.

That creates an uncomfortable contrast with the partnership’s own language. The joint statement describes Canada and Türkiye as NATO allies bound by human rights, individual liberties, democracy and the rule of law. Erdoğan’s government has maintained that Turkish courts are independent, while rights groups argue that judicial and political pressure has intensified. For Canada, the challenge will be keeping the economic opening from becoming a blank cheque. A deeper trade and defence relationship may give Ottawa more channels to raise difficult issues, but it will also increase the temptation to avoid disputes that could jeopardize commercial or security gains.

The Deal Matters, but Türkiye Cannot Replace the U.S. Market

The agreement is significant, but its real value will be determined by execution. Türkiye accounted for less than 0.3% of Canada’s total merchandise trade in 2025, while the United States still took the overwhelming majority of Canadian exports. Even if bilateral Canada–Türkiye trade eventually reaches Erdoğan’s US$10-billion ambition, the relationship will remain far smaller than Canada’s U.S. connection. That is why the partnership should be viewed as one piece of a larger Canadian strategy rather than a dramatic pivot from one dominant market to another.

There are now clear milestones to watch: whether free-trade negotiations produce a credible agreement, whether the expanded air pact is fully implemented, whether defence companies announce joint projects, whether a Canadian nuclear bid advances, and whether the planned 2027 trade mission generates contracts. The three-year action plan gives both governments a framework for measuring progress. For Canadian workers and businesses, the most meaningful result would be a wider set of customers and partners that makes future U.S. shocks less damaging. The Ankara signing does not deliver that resilience overnight, but it moves Canada one step closer to building it.

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