UK secures rollover trade deal with Canada
Prime Minister Boris Johnson and Canadian Prime Minister Justin Trudeau, joined by International Trade Secretary Liz Truss and her Canadian counterpart, Minister of Small Business, Export Promotion and International Trade Mary Ng agreed an ‘agreement in principle’ to roll over current EU-Canada trading arrangements and begin negotiations on a new, bespoke UK-Canada trade deal in 2021.
The agreement to rollover provisions of the Comprehensive Economic and Trade Agreement (CETA) gives certainty for UK businesses exporting goods and services to Canada worth £11.4bn. It will support the British automotive manufacturing and food and drink industries which between them provide jobs for more than half a million people across the UK.
Overall, an estimated £42m tariff burden on UK exports has been saved. The benefits locked in under the agreement reached today include:
- Future zero tariffs on UK car exports to Canada, which were worth £757m last year, supporting factories and jobs in our communities. Without this agreement, Canada’s standard tariffs on cars of 6.1% would apply.
- Tariff-free trade on 98% of goods that can be exported to Canada including beef, fish and seafood and soft drinks.
- UK producers will continue to benefit from zero tariffs on many agricultural and seafood exports including chocolate, confectionary, fruit and vegetables, bread, pastries and fish. Last year the UK exported £344m worth of agri-food goods to Canada.
- Without the continuity agreement, Canadian food products such as maple syrup, biscuits and salmon could have been more expensive for British consumers as they would face taxes of up to 8% when entering the UK under the UK Global Tariff.
Prime Minister Boris Johnson said: “This is a fantastic agreement for Britain which secures transatlantic trade with one of our closest allies. British businesses export everything from electric cars to sparkling wine to Canada, and today’s deal will ensure that trade goes from strength to strength. Our negotiators have been working flat out to secure trade deals for the UK, and from as early next year we have agreed to start work on a new, bespoke trade deal with Canada that will go even further in meeting the needs of our economy.”
Josh Hardie, acting Director-General of the CBI said: “Agreeing a deal with Canada that secures continuity of trade is great news for businesses on both sides of the Atlantic. Whether it’s manufacturers still sending their products between the two counties tariff-free, or UK firms being able to sell their services into the Canadian market, this is a real milestone. The signing of this deal can now lay the foundations for an even deeper trade agreement, tailored to both economies. Business stands ready to work with government to achieve that goal and to promote opportunities with Canada. Miles Beale, Chief Executive of the Wine and Spirit Trade Association, said:
“This is a good result for the UK wine and spirit industry. Canada is an important market that is growing for UK exporters, particularly our small and medium sized gin and English wine exporters. This agreement doesn’t just confirm the continued removal of tariffs, but gives us some extra footing and mechanisms to engage with the Canadians on their complex alcohol market, which is controlled at a provincial level. It should allow UK businesses to be more competitive in the Canadian Liquor Board system and that’s a positive step in helping us to grow in the market.”
Tony Joseph, Regional Director for The Americas, McLaren Automotive said: “As an innovative British-based bespoke manufacturing business exporting to meet a growing demand for McLaren’s supercars among Canadian buyers, today’s news that the UK and Canada have secured a continuity trade agreement is welcomed. It provides added certainty and continuity both for us and our Canadian retail partners, customers and employees as we continue to build our presence in this key global market.”
FSB National Chairman Mike Cherry said: “There was always a danger that the end of the transition period would mean losing wider international market access that we enjoyed as part of EU membership. So it’s really encouraging to see new trade deals secured with trading partners like Canada, long since seen as a crucial market by small firms. The fact that this new agreement upholds the small business chapter that was previously in place is very welcome. We look forward to such chapters being at the centre of all future UK trade deals.”
Alex Altmann, a partner at Blick Rothenburg law firm, said: “UK businesses will be relieved to see that a rollover trade deal with Canada has been sealed. The rollover deal provides a platform for deepening the trading relationship further in the years to come. The Government has successfully sealed a number of rollover trade deals now, but more deals must come with key markets, including Australia, Singapore and Turkey.
“The most important trade deal to be sealed is the Brexit deal with the EU. Businesses on both sides are desperate for an agreement to be reached. The UK Government must redouble their efforts this week to give businesses the certainty they need to continue trading with the EU next year.”