Keeping Canada-U.K. trade issues in perspective

LONDON, U.K.—There was a bit of hyperventilating recently when the United Kingdom unilaterally announced a “pause” in free trade talks with Canada because they didn’t think they were getting a deal that “delivered” for them. They specifically mentioned their cheese exports to Canada, and the “rules of origin” affecting some of their manufactured exports to Canada. The Canadian reaction was basically “keep calm and carry on!” Two-way trade in goods and services between our two countries totals close to $45-billion per year— that’s about $1-billion in British pounds every fortnight. It’s growing, and it’s 99 per cent tariff free. The current British kerfuffle is about that remaining one per cent. It does not affect the 99 per cent. It’s useful to keep those orders of magnitude in perspective. Until recently, trade between Canada and the United Kingdom was governed very successfully by the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union. It was negotiated when Britain was part of the EU, and the U.K. took good advantage of it. For example, CETA provided ample quotas to sell British cheese—tariff free—into Canada. But then, in 2020, the British decided to leave the EU and get out of CETA. That was their sovereign choice, but it does have consequences—including their abandonment of that cheese quota into Canada. They left it with the EU in Brussels. Immediately following Brexit, Canada and the U.K. negotiated a Trade Continuity Agreement to fill the void. It came into effect early in 2021, and remains ongoing. For the most part, it extends much of what previously existed under CETA. With respect to cheese, since the quota the U.K. had been using to export to Canada was reserved specifically for the EU, Canada granted Britain a grace period of close to three years—to Dec. 31, 2023,—to adjust to the new reality that they were no longer an EU member. This time frame was clearly laid out in writing by both countries, and is consistent with the U.K.’s terms of departure from the EU. The U.K. bears the prime responsibility for dealing with the consequences. About the rules of origin: trading partners typically spell out such rules in their trade deals to define those goods that are domestically manufactured and therefore eligible for tariff preferences, as opposed to non-domestic products which have too much foreign content to qualify for tariff breaks. Canada has successfully negotiated sensible rules of origin in our multiple trade agreements with Europe—including CETA— North America, and the Pacific region. We know this is a topic of importance to the U.K. because of the significant EU content in some of their manufactured goods, like autos, for example. Again, recognizing the need for a transitional period after Brexit, Canada and the U.K. gave themselves until March 31, 2024,—still two months from now—to negotiate an appropriate new bilateral rules of origin regime. Those negotiations were underway and making progress until the U.K. “paused." That timing is puzzling. In any event, Canada is always available to resume talks. We want a deal that works well for Canadians, too. We have a good reputation as a trusted trading partner that works hard to uphold a fair and effective, rules-based, international trading system. That is important at a time of global uncertainty and upheaval. Also important are the other things that a new bilateral Canada-U.K. trade agreement could move forward, such as greater engagement in international trade by our small businesses and enterprises owned by women, Indigenous people, and cultural minorities; more bilateral partnerships in science, technology and innovation to drive advancements in pharmaceuticals, food ingredients and proteins, clean energy, the digital economy, AI, quantum, and cyber; and stronger supply chains for critical minerals and other vital commodities essential to national and economic security in both our countries. A reliable ally, partner and friend, Canada is ready to get on with it. Ralph Goodale is Canada’s high commissioner in the United Kingdom. He is a former federal minister of agriculture, natural resources, public works, finance, and public safety, as well as former House leader in both government and opposition. The Hill Times

Keeping Canada-U.K. trade issues in perspective

Two-way trade in goods and services between our two nations totals nearly $45-billion per year. It’s growing, and it’s 99 per cent tariff free. The current kerfuffle is about that remaining one per cent. Let’s keep those orders of magnitude in perspective.

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Keeping Canada-U.K. trade issues in perspective

Two-way trade in goods and services between our two nations totals nearly $45-billion per year. It’s growing, and it’s 99 per cent tariff free. The current kerfuffle is about that remaining one per cent. Let’s keep those orders of magnitude in perspective.

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