- (?)That is the book of Peter.
- (*)That is the Peter's book.
- That is Peter's book.
(?)That is the book of Peter's.
(*)That is a book of Peter.
- (*) That is a Peter's book.
- That is a book of Peter's.
We normally use the 's structure, rather than of when we talk about possessions, relationships and physical characteristic, especially when the 'possessor' noun refers to a person, animal or to a country, organisation or other group of creatures [see Swan (2005.440), Practical English Usage]. That is why sentence 3 is natural and sentences 1 and 5 are not. However when the 'possessor' noun is not a person but one of the other types mentioned, both the of and the 's constructions are possible: The President of Russia and Russia's President.
We cannot usually put a possessive between another determiner and a noun. Instead, we use a structure with of + possessive (Swan p.443). Sentences 2 and 6 are therefore incorrect English. Sentence 7 is natural. The definite article defines its noun, and sentence 4 is therefore unnatural, though That is the book of Peter's that I was talking about is acceptable, as the definite article defines one of several of Peter's books.
So, That is the territory of Canada/ the European Union/the United Kingdom and That is Canada's/ the European's Union's/The United Kingdom's territory are possible as is That is Canadian/European Union/United Kingdom territory. In that last sentence, 'European Union' and 'United Kingdom' function adjectivally.