Eyes turn to trade-pact clock after latest U.K. government toss-up

With negotiation of a new Canada-U.K. free trade agreement set to be completed within the next 17 months, it remains to be seen what impact the new occupant of 10 Downing Street will have on the talks. The Canada-United Kingdom Trade Continuity Agreement (TCA), which rolled over Canada’s trade deal with the European Union to apply to British trade, was finalized at the end of 2020 and came into force in April 2021. The transitional deal sets out that a comprehensive agreement be completed by April 1, 2024, however, that timeline is non-binding. With the fallout from the resignation of now-former U.K. prime minister Liz Truss and the accession of her successor, Rishi Sunak, Canada will have a new dance partner to negotiate a free trade agreement. U.K. Secretary of State for International Trade Kemi Badenoch, who was originally appointed under the short-lived Truss cabinet, continues in the role under Sunak. Badenoch has yet to meet with Canada’s International Trade Minister Mary Ng (Markham-Thornhill, Ont.). Truss resigned as U.K. Conservative leader, and prime minister, on Oct. 20, with Sunak becoming prime minister after being elected as the new Tory leader on Oct. 24. Canadian Cattle Association vice-president Dennis Laycraft told The Hill Times that the effects of the change in U.K. leadership on the trade negotiations remain to be seen. “As far as the new prime minister and what impact he will have, that is still a little unclear. But to us we're really looking at really the next 11 months as a kind of being the crucial phase of negotiations,” he said, noting that there are parallel negotiations with the bilateral trade talks and the U.K.'s wish to accede to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which Canada is party to along with 10 other Pacific Rim nations. Canada has previously indicated that the bilateral negotiations are an “important factor” in its support for the U.K.’s CPTPP accession. Laycraft suggested there is a lot of work to be done to achieve positive results on both the bilateral deal and the CPTPP. Opposition MPs have raised concerns about the government’s progress in completing a free trade deal by the timeline set out in the TCA. NDP MP Brian Masse says the change in U.K. political leadership creates an 'additional layer of anxiety' to trade talks. The Hill Times photograph by Sam Garcia “With the rapid changes of political leadership there, it creates an additional layer of anxiety,” said NDP MP Brian Masse (Windsor West, Ont.), his party’s international trade critic. “These are political decisions, so it’s going to require some degree of political stability there and they are not anywhere near it.” He added that issues like inflation will also complicate talks, to make sure that a potential deal isn’t going to jeopardize workers or industries. At this point, Masse said the April 2024 timeline to complete the deal is not realistic. “It’s probably not going to take place, but … there’s no hard deadline at the end of day, so there is a little bit of ease in that,” he said. Conservative MP Kyle Seeback (Dufferin-Caledon, Ont.), his party’s international trade critic, said he is concerned that a new comprehensive trade pact hasn't yet been reached. “I would’ve thought we’d be further along than we are now. changes in the U.K., that could delay things, and I’m hopeful that it won’t,” he said. “Brexit was Jan. 30, 2020, and here we are not having a final agreement with the U.K.” He said it seems like the government hasn’t been “working aggressively or seriously enough” in the negotiations. “And now due to other circumstances, we may have further delays,” said Seeback. Both Masse and Seeback raised concern over supply management concessions in trade talks, which have consistently been a sensitive subject for Canada in trade negotiations. The U.K. has indicated that it will continue to pursue dairy access to the Canadian market, despite Canada’s declaration that it isn’t a subject of trade talks. Masse said the negotiations may give impetus to move quicker to consider a Bloc Québécois private member’s bill to bar supply management concessions in trade talks. “It is a worthwhile examination, and it is something we should be looking at sooner rather than later,” he said, remarking that supply management provides stability in the market and ensures the quality of the Canadian dairy market. Bloc Québécois MP Luc Thériault (Montcalm, Que.) introduced Bill C-282 in June, which mirrored a similar Bloc bill introduced during the previous Parliament. Before the 2021 election call, that bill had reached report stage in the House with the backing of the Liberals, Bloc, NDP, and some Conservatives. Bloc Québécois MP Luc Thériault introduced a private member's bill in June to bar supply management concessions in trade negotiations. The Hill Times photograph by Andrew Meade Seeback was one of 37 Conservative MPs to back the bill. “We have to look at that, and we are going to look at that. That is something we are going to be discussing as a caucus in the near future,” he said, noting that he does have some concerns with the bill. Independent Senator Tony Dean (Ontario) took part in a recent trip to the U.K. as a vice-chair of the Canada-United Kingdom Inter-Parliamentary Association during which the delegation spoke with members of the U.K. House of Commons Committee for International Trade. “What I heard is that people have their heads down and are working away at this and all of its complexities,” he said. “Everyone is working towards 2024. I think the sense is that it will take until 2024. People recognize that is the deadline, and they are taking steps to work towards that and achieve the conclusion of these talks before the deadline.” Dean said he thinks there is more pressure on the U.K. than Canada in a post-Brexit context to conclude the deal, and said it is too early to say whether the change in political leadership in the U.K. will bring about delays. “But from the perspective of the trade committee that we talked to, we were not hearing any suggestions of a change in tone of substance from those talks. The discussions were very much about progress being made, stretch target, but probably achievable with hard work on all sides,” he said. Shanti Cosentino, a spokesperson for Ng, said nothing has changed in the negotiations and that Canada is “continuing negotiations towards a high-standard, progressive free trade agreement that drives economic growth and creates jobs in both our countries.” While Sunak hasn’t publicly commented on the Canada-U.K. transitional deal, he was critical of the post-Brexit deal that Truss negotiated with Australia, remarking during the summer Conservative leadership race that it was “one-sided” against British farmers. The Business Council of Canada’s Trevor Kennedy, vice-president of trade and international policy, said he isn’t overly concerned that the change in British leadership will have an effect on the talks. While the U.K. missed a self-imposed deadline during which it hoped to complete trade talks with India, Canada and the U.K. have a “much larger runway” than the ambitious timeline the U.K. and India set, Kennedy said. The U.K. had previously stated an aim to finish bilateral trade negotiations with India by Oct. 24. “We have time, and we have time to complete the process,” he said, noting that there is a “period of certainty” with the TCA already in place. He said Canada is starting in a “very good place” with the TCA, and that any limits on the ambition for the comprehensive agreement may depend on how far each country is willing to move on sensitive issues. “I’m not sure how far they’re willing to move on some of those issues,” he said. Trade consultant Peter Clark, president of Grey, Clark, Shih and Associates, said Canada-U.K. trade hasn’t been made a top priority of the Trudeau government and that the focus instead seems to be on access to the CPTPP. He noted that the bilateral trading relationship isn’t in Canada’s favour. “The TPP is a good agreement, some people might say it is a better agreement for Canada than CETA ,” he said. Cereals Canada’s Mark Walker, vice-president of markets and trade, said in a statement that the group is “pleased” with the progress towards a Canada-U.K. trade agreement. “For our sector, it is important that the tariff reductions for lower protein wheat in the current Canada-U.K. Trade Continuity Agreement carry over into the Canada-U.K. FTA. We continue to highlight the importance of seeing the UK's import regulations aligned with international standards on sanitary-phytosanitary and maximum residue limits and as well as for the creation of effective dispute resolution mechanisms in those areas,” he said. nmoss@hilltimes.com The Hill Times

Eyes turn to trade-pact clock after latest U.K. government toss-up

Conservative and NDP trade critics are raising concerns over supply management concessions in Canada-U.K. trade talks.

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Eyes turn to trade-pact clock after latest U.K. government toss-up

Conservative and NDP trade critics are raising concerns over supply management concessions in Canada-U.K. trade talks.

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