Britain is covered by the European Union’s trade deal with Canada and is expected to continue following its provisions
After more than three years of debate, the United Kingdom is leaving the European Union on Jan. 31.
That exit may open new trade opportunities for Canada.
The U.K. will remain part of the Comprehensive Economic and Trade Agreement until the end of this year but it already has an ambitious agenda to start bilateral negotiations with the United States, New Zealand and others, said Andy Barr, head of economics and trade policy with the British High Commission in Ottawa.
The U.K.’s first order of business is to establish a new relationship with the EU because it wants tariff free access to a region that remains a primary trading partner.
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
Canada is covered by CETA, and the U.K. is likely to follow its provisions because it considers it a good, comprehensive deal. However, it will examine the pros and cons of the agreement and make adjustments that fit better for the two countries, he said in an interview after a talk at the Canada West Foundation in Calgary.
“Our preference would be to lock in the terms of trade currently afforded by CETA until the U.K. can have its agreement,” he said.
“Some agriculture industries talked to me about the gaps and limitations. We will have the ability in due course to examine those regulatory issues. We have the legal competence to discuss those at the bilateral level for the first time in 43 years.”
There are differences of opinion over issues such as sanitary and phytosanitary requirements in the EU. The U.K. is unlikely to change those.
“We will not lower our standards. We will still apply high quality standards. However, there may be some leeway,” he said.
An economic analysis from the Canada West Foundation found Canada is under-trading with the U.K. but it did not analyze the reasons, said Sharon Sun, trade policy economist with the foundation.
“Canada is under-trading with the U.K. in general but specifically for goods excluding precious metals. We are under-traded by four billion pounds ($6.9 billion),” she said.
“For agriculture we are 264 million pounds ($455 million) under-traded in 2016 prices. In terms of agriculture and agrifood exports, the reason we are under-traded could be because of domestic reasons.”
Other countries outside the EU could also do more business, but they do not.
In the new trading realm, the U.K. may lose some EU markets but could pick up the losses in agreements with other countries. The U.K. is already doing business in Asia and the U.S.
Sun said the U.K. should consider applying for membership in the Comprehensive and Progressive Agreement for Trans-Pacific Trade to diversify its trade portfolio.
“It would really be in the U.K.’s interest to join the CPTPP,” she said.
- Farmers are no longer eligible for EU farm payments, which average around 54 percent of farm income.
- In mid-January the British government announced a new agriculture bill that promises to boost productivity but also rewards farmers for environmental improvements, said a news release from the Agriculture and Horticulture Development Board, which represents U.K. commodity groups.
- Direct payments will be replaced over seven years with more support for environmental work on farms.
- The bill also wants improved livestock traceability and more regulations for fertilizer use.
- Canada has provisions to ship beef, bison, pork and other red meat to the European Union, but trade has been limited. The beef trade is slowly developing and Canada is still working on trade-limiting rules governing food safety.
- Canfax reports that Canada shipped 496 tonnes of beef worth $7.8 million to the EU in 2017. Shipments more than doubled in 2018 when 1,059 tonnes worth $15.5 million were exported. Between January and November 2019, Canada had exported 1,712 tonnes worth $23.7 million.
- Latest figures for 2017 showed the United Kingdom exported 110,300 tonnes of beef and 42,200 of offal products.
- It exported 78,100 tonnes of sheep meat and 6,500 tonnes of offal. Export destinations included Canada, Africa, the EU and Japan.
- Information from the federal government said the EU is the largest beef market in the world worth about $18.6 billion with the top outside suppliers being Brazil, Argentina, Uruguay and the United States.
