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Canada-UK Free Trade Agreement

The United Kingdom (UK) is one of Canada’s largest and longest-standing trading partners in Europe and Canada’s third-largest partner country for trade in goods and services. 

Background

The United Kingdom officially left the European Union (EU) on January 31, 2020. In the exit package, the UK was allowed to have its foreign trade agreements covered by the EU-third country trade agreements until 31 December 2020. Canada signed an interim agreement replicating provisions in the EU trade agreement to ensure the continuity of trading arrangements. This interim agreement, the Canada-UK Trade Continuity Agreement (TCA), signed on December 2020 received royal assent on March 17, 2021.

The TCA was based on the Canada-EU Comprehensive Economic and Trade Agreement and was intended to avoid disruptions in the Canada-UK trade relation. The TCA had a transitional nature meant to create time for Canada and the UK to work toward negotiating a new comprehensive Free Trade Agreement (FTA). On March 24, 2022, Canada and the United Kingdom (UK) launched negotiations toward a Free Trade Agreement (FTA). As of December 2022, the FTA is in its fifth round of negotiations. 

On 1 February 2021, the UK formally requested to join CPTPP. In June of 2021, CPTPP nations agreed to the UK’s accession process start. The UK is currently negotiating its accession with CPTPP members. 

 

CAFTA Position

Canada cannot risk losing market share to our competitors in the UK, many of which are actively engaged in free trade negotiations, while others have already concluded talks with the UK government. It is vital that Canada preserves competitive access and enhances its preferential access to this important and high-value market. CAFTA remains concerned with the EU’s unwillingness to remove trade barriers preventing Canada from reaching its full potential under CETA. We are equally concerned with such obstacles being carried over to both a transitional deal and a future FTA between Canada and the UK.

At the same time, any transitional agreement should not be the template for a future bilateral negotiation during which CAFTA would seek a more ambitious outcome for agri-food exporters and the removal of technical barriers. Therefore, CAFTA is calling on the Canadian government to adopt a two-stage approach:

  • Finalize a bilateral Canada-UK transitional agreement that reflects CETA’s negotiated outcomes. This will ensure exporters on both sides preserve the duty-free access and other benefits that are already in place. At the same time, a transitional bilateral agreement must respect the spirit of CETA in ensuring technical barriers to trade are not used to block exports as is currently the case for many Canadian agri-food exporters’ efforts in the European Union.

  • As a transitional agreement is reached, both sides should immediately commit to negotiating an ambitious, comprehensive, and permanent bilateral pact that removes tariffs and non-tariff barriers provide liberal rules of origin and creates a level playing that will enable increased trade and deliver commercially viable growth for agri-food. To ensure both sides benefit from long-term predictability and certainty, these negotiations should be launched and concluded as quickly as possible.

 

See CAFTA’s most recent statements on the Canada-UK FTA

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