Brexit uncertainty is no more, with the United Kingdom officially leaving the European Union on Jan. 31.
But that isn’t the end of the story.
By December 2020, the end of the transition period during which trade rules between the U.K. and EU remain the same, a new trade agreement must be in place. At the same time, the recently implemented CETA (Comprehensive Economic and Trade Agreement) between the EU and Canada will no longer apply to trade with the U.K.
In 2018, Canadian Prime Minister Justin Trudeau’s trade negotiating team held back on new trade talks with the U.K. after learning that, in the event of a no-deal exit with the EU, the U.K. would remove virtually all import tariffs. This would have made the market significantly more accessible for Canada and require no reciprocal action or concessions.
At the time, Canada’s decision to hold back on trade talks made sense. But now that a deal exists for the U.K. to leave the EU, further indecision can only be a bad thing.
Despite the fact that U.K. Prime Minister Boris Johnson has a deal with the EU in place, Canadian leaders have apparently not made new trade talks a priority.
But that hasn’t put off United States President Donald Trump, who has made it very clear that the U.S. is willing to do a deal with the U.K. Talks are ongoing.
So what does this mean for Canada?
It all depends on whether the Canadian government moves to make new arrangements with the U.K. CETA won’t necessarily roll over at the end of 2020, especially if the U.K. favours a new relationship with the U.S. over continued alignment with the EU.
There’s no good reason for Canada to withhold from trade discussions. If anything, Trudeau is failing Canadians if he doesn’t step up to save what could be a continued source of positive trade for Canada.
Canadian agricultural exports to the EU are worth about $2.9 billion with most of that going to the U.K.
Since 2017, U.K. exports of goods to Canada have increased by 13.7 percent. Canadian exports to the U.K. were worth US$13.6 billion in 2017 and US$12.6 billion in 2018. What argument could the Canadian government have for continuing to withhold from talks?
Canada could also be missing an opportunity to form trade agreements with the U.K. for products that the EU doesn’t accept under the current CETA arrangement. Biotech has been a source of contention during CETA negotiations with the EU, which refuses to loosen up strict rules on importing genetically modified foods. If the U.K. can escape the regulatory barriers blocking trade with the U.S., that can a work in Canada’s favour.
But Canada needs to begin negotiations now, before the European Union can destroy any such possibility.
The future of CETA, at least between the U.K. and Canada, is uncertain. Canada needs to initiate talks, as the United States has, to build on a strong trading relationship with the U.K. and unlock even more benefits.
Jack Buckby is a research associate with the Frontier Centre for Public Policy and a British author and researcher, with experience working in English, American, Canadian and Polish media. This article was originally published on Troy Media’s website. It has been edited for length.