U.K. needs Ottawa to approve trade deal
Tariffs may take effect if Parliament doesn’t act on post-Brexit accord
The U.K. government fears that its post-Brexit trade deal with Canada will not come into force in time to prevent tariffs being imposed between Britain and its 12th-largest trading partner from Jan. 1.
The agreement is yet to be approved by the Canadian Parliament, which rises for its recess on Friday, and that is causing deep concerns among U.K. officials, according to a person familiar with the matter, speaking on condition of anonymity.
Britain and Canada announced an accord in principle in November, agreeing to roll over the terms of the EU-Canada free-trade agreement that the U.K. benefited from when it was a member of the bloc. Without the continuity deal, bilateral trade worth about £20 billion ($34 billion Canadian) would face World Trade Organization tariffs, starting next month.
Trade Minister Mary Ng introduced the bill in the Canadian legislature on Wednesday. If lawmakers in the House of Commons manage to approve the deal by Friday, it then needs to be approved by the Senate before it can become law. The Senate’s last sitting day is scheduled for Dec.18, according to its calendar.
If the bill gets blocked, businesses could have to pay tariffs for at least a few weeks, with lawmakers set to return on Jan. 25.
However, two Canadian officials said the government may seek out regulatory mechanisms that could mitigate the problem in the short term.
Agriculture is one of the affected industries. If the agreement is not passed in time to prevent tariffs, pork producers are looking at possible shortterm adjustments such as delaying shipments or absorbing or sharing increased costs with customers, said Gary Stordy, a director of government and corporate affairs with the Canadian Pork Council.
Canada exported 317,000 kilograms of pork to the U.K. last year and imported 372,000 kg of pork from the U.K., Stordy said.
The Canadian Cattlemen’s Association said Wednesday that achieving a long-term free trade agreement with the U.K. is its highest priority because Canadian beef producers continue to face hurdles to export to the U.K. In 2019, Canada exported 1,584 tonnes of beef to the U.K. and imported nearly twice that amount from the country, the group said.
Meanwhile, in Brussels, Brexit negotiations between the U.K. and the EU are on course to end without a trade deal barring a dramatic last-minute intervention, according to officials with knowledge of the discussions.
Wednesday night’s dinner between Prime Minister Boris Johnson and Ursula von der Leyen left officials on both sides expressing concern that it may be impossible to reconcile their differences.
The officials said that while the mood of the meeting in Brussels was cordial, it didn’t change much of substance: something needs to happen with only days remaining to find a deal.
Negotiators from both sides will spend the coming days searching for a breakthrough before the latest deadline, set for Sunday. So far, their discussions have been deadlocked over disagreements on the EU’s right to fish in British waters and the so-called level playing field for business.