The CETA agreement has made a difference to UK companies, although future arrangements for trade remain in the balance.
A core reason for this post is to clarify the position on the Comprehensive Economic and Trade Agreement between the European Union and Canada (CETA). Several recent media articles could easily mislead.
Whilst it is correct that CETA needs to be ratified by individual governments within the EU, this does not give individual countries treaty rights. The CETA agreement is solely between the EU and Canada.
If the UK leave the EU, we will have no rights under CETA and will need to negotiate separate trade terms. Bearing in mind that the EU – Canada deal took around 20 years, may be a while before they are in place.
Trade Goes On
We should equally be clear that leaving the EU and CETA does not mean UK companies are unable to trade with Canada. World Trade Organisation rules will apply, along with other international norms between developed countries.
The first year report on CETA activity states that 10,570 British companies export to Canada, and 240,000 UK jobs are partly reliant on this. How much this will fall, or fail to grow due to lack of trade terms is hard to define.
An openness lock which is part of CETA will not apply, which can be valuable for financial services, or IT providers. Copyrights and trademark protection are reduced, a number of other legal scenarios will change.
Even so, English common law is the basis for the legal framework in most provinces, language is shared, as are many norms. Canada will not become a hard place for us to do business in a general sense.
Tariff issues will however emerge across a range of goods and there may be bias on aspects such as bidding for public contracts, or working with others who are.
If we do need a new trade deal with Canada, suggestions of this being in place in a year or two are not realistic but neither should we need to wait 20 years.
Canada exports £14 billion of goods and services to the UK, compared to £9 billion in the other direction. Whilst this is in part EU gateway traffic, a trade surplus still gives them an incentive to negotiate.
Our systems are to a degree in tune, as in the ATA carnets to Canada we issue for temporary export, which are well handled at the other end. Their provision for permanent exports is rational, if we do end up as a third country.
Should you need to export goods to Canada, this guide may help. For up to date information on temporary exports and ATA carnets, you are welcome to contact us at any time.