These days, we have become accustomed to virtual engagement and Zoom being the norm. But when the prime ministers of the U.K. and Canada appear together on Zoom, you know something important is afoot.
And so it was on November 21, when prime ministers Boris Johnson and Justin Trudeau, supported by their trade ministers, Liz Truss and Mary Ng, announced the adoption of the U.K.-Canada Trade Continuity Agreement.
With a formal agreement in principle to roll over the current EU-Canada trading arrangements (the Comprehensive Economic and Trade Agreement – CETA) the U.K. and Canada have locked in their existing trade relationship. Agreement has also been reached to negotiate a new bespoke, more ambitious, trade deal as early as next year.
The agreement gives certainty to U.K. and Canadian businesses exporting goods and services between our two countries. It takes effect from January 1, 2021, and ensures that both countries can continue to build on the strong trading relationship that totalled $44 billion in goods and services in 2019.
Behind the U.S. and China, the U.K. is the third-largest buyer of Canadian goods, so securing continuity matters. Most products traded back and forth between the U.K. and Canada will be tariff-free, with 98% of goods set to be covered after three years. This agreement locks in certainty for Canadian businesses exporting goods and services to the U.K. including machinery, aircraft and spacecraft parts as well as seafood.
U.K. companies will also benefit from the same certainty, including the export of cars and car parts, pharmaceutical products, beverages and spirits. For example, as of this month you can now enjoy the world’s first carbon-neutral gin, Nadar Gin, distilled by Scotland’s Arbikie Distillery in British Columbia. Carbon-neutral and tariff-free has to be an incentive. And I can testify to the fact that it’s very good!
The U.K. is B.C.’s second-largest goods trading partner in Europe. B.C. goods exported to the U.K. totalled $528 million in 2019.
Without the agreement, U.K. consumers would be unable to enjoy Canadian maple syrup or B.C.’s unroasted decaf coffee exports (worth $2.2 million last year), without having to pay an additional 8% in tariffs.
Exports of certain proteins from B.C. to the U.K. were worth $5.7 million last year, one of the top food exports for the province from 2015 to 2019. This deal gives producers continued access to the U.K. market.
Knowing how popular British cheese is, you’ll want to know about that. We’ve come to an arrangement in which the U.K.’s excellent cheese producers will have continued access to the Canadian market at the same zero tariff rate from January 1.
The November 21 announcement means that, in just less than two years, the U.K. has agreed to trade deals with 53 countries, accounting for £164 billion of bilateral trade. It takes the U.K. one step closer to becoming a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), of which Canada is also a member.
Membership of the CPTPP is a key part of our trade negotiations program, helping British businesses secure more opportunities in 11 key Pacific markets. These 11 key Pacific markets account for 13% of global GDP
We now look forward to an even more ambitious trade deal with Canada, one that has the potential to go even further in areas such as digital trade, women’s empowerment and the environment – and deliver for businesses, workers and consumers on both side of the Atlantic.
The deal now needs to be approved by both parliaments. There is genuine will on both sides to make this happen quickly so as to ensure businesses can continue trading without any disruption.
In this virtual world we now live in, it’s good to see that trade agreements such as this will see more tangible products in the hands of consumers on both sides of the Atlantic. •
Nicole Davison is the British Consul General to Vancouver.