Canada pushes EU trade deal as it teeters on Brexit cliff edge

U.K. cannot officially negotiate new agreements before it has finished leaving the bloc, but it has had preliminary international discussions

Canada wants to avoid a Brexit cliff edge, too.

The government is pushing for its trade deal with Europe to be ratified by Britain before it leaves the European Union to secure the crucial agreement.

It also has its eye on deeper relations with the U.K. once Brexit is complete.

Canada wants to preserve any preferential access that businesses or investors currently have, High Commissioner to the U.K. Janice Charette said in an interview from her office overlooking Trafalgar Square on Monday.

“That’s the idea of avoiding some kind of a cliff edge,” she said.

Also, “we’ll be interested in seeing what we can do to enhance the bilateral arrangement” after the U.K. is out.

While Britain can’t officially negotiate new trade accords until it has finished leaving, it has held preliminary discus- sions with several countries.

The prospect of leaving the bloc without alternative arrangements in place is commonly referred to as the “cliff-edge,” which businesses say would be the most destructive outcome.

Canada’s efforts to remove trade barriers with the Comprehensive Economic and Trade Agreement (CETA) come at a time when protectionist sentiment is increasing globally.

U.S. President Donald Trump has been ratcheting up rhetoric against free trade, while Group of 20 finance chiefs removed aline to “resist all forms of protectionism” in their latest communique.

Charette said the Canadian government has been successful at expanding trade while maintaining public confidence by engaging its provinces, territories and industries, as well as reforms to help the middle class.

“We’re all comparing notes in terms of how best to make sure that the interests of our countries are well understood.” HIGH COMMISSIONER TO THE U.K. JANICE CHARETTE ON U.S. PRESIDENT DONALD TRUMP

“Various different pieces of this are put together, really with a view to supporting the interests of Canada as an open market, free-trading country,” she said.

Trudeau’s finance chief, Bill Morneau, released his second federal budget on Wednesday.

When it comes to Trump, “we are their closest neighbour, so people are curious to see if we have any insights to share,” Charette said. “We’re all comparing notes in terms of how best to make sure that the interests of our countries are well understood.”

The CETA agreement could provide some guidance for modernizing the North American Free Trade Agreement, which Trump has pledged to renegotiate, Charette said.

Canada’s deal with Europe is set to boost trade with the EU by about a quarter, according to government estimates. The U.K. is Canada’s biggest partner within the bloc, and Charette sees further opportunities.

Technical discussions to preserve CETA with the U.K. after Brexit have begun. Francois-Philippe Champagne, appointed Canadian trade minister this year, has met with U.K. Trade Secretary Liam Fox several times already, Charette said.

CETA will be enacted provisionally later this year, reducing tariffs on products such as maple syrup and fresh Canadian lobster. Other parts of the agreement, such as investorstate dispute settlements, will only come into effect with the consent of domestic parliaments. “The sooner that happens the better, because the longer that goes on, the bigger the chance is that you have change in political leadership,” she said.

She also stressed that Canada’s experience negotiating with Britain in the face of Brexit doesn’t mean it will be so easy for everyone.

“There’s a difference between countries now that have a trade agreement with the EU and countries that don’t,” Charette said. “If both countries put a priority on it, and they have the capacity, they can move quickly — but that’s a lot of countries to deal with, and you can’t do them all at the same time.”