On March 5, the Canada West Foundation hosted Beyond Brexit , the second session in our Trade Ahead Series (register for upcoming sessions here). Keynote speaker Andy Barr, Head of Economics & Trade at the British High Commission in Canada, shared his insights with CWF’s Sharon Sun, Trade Policy Economist, and co-moderators Patrick Mattern, Vice President, Business Development, Calgary Economic Development, Mariette Mulaire, President and CEO, World Trade Centre Winnipeg, and Mustafa Sahin, Vice President, Investment & Trade, Edmonton Global.

Where the first session was likened to sitting in a bar post-conference, this session was more of a lunch chat among colleagues to discuss the United Kingdom’s (UK) post-Brexit future and where Canada  and Western Canada fit in.

Here are a few highlights from the talk:

  • The European Union and the UK have secured a deal which allows for zero per cent tariffs and zero per cent quotas. This deal establishes a baseline in which businesses can navigate while allowing room to grow.
  • Similarly, the United Kingdom and Canada have a continuity agreement (Canada-UK Trade Continuity Agreement, or Canada-UK TCA), which is currently moving through the Canadian parliamentary process. A memorandum of understanding (MOU) is in place to allow businesses to continue in the meantime. The continuity agreement, once approved and in force, will establish a baseline for Canada and the UK from which to negotiate a bilateral trade agreement. Once in force, the countries will have twelve months to negotiate an agreement.
  • The bilateral agreement allows Canada and the UK to negotiate on terms specific to their economies and interests. This agreement would also allow businesses and other stakeholders to provide fresh insight into what they want to see over the next decade and would be a chance to update from the Canada-European Union Comprehensive Economic and Trade Agreement (CETA).
  • In addition to the bilateral agreement, the UK has also formally announced that it will begin the Comprehensive and Progressive Agreement for Trans-Pacific Partnership accession process. If completed, this would mean the CPTPP would represent 16 per cent of global GDP; it currently represents 13 per cent of global GDP.
  • In terms of the Canada-UK relationship under CPTPP, the UK does not compete with Canada in terms of agricultural and is quite complementary. Certain Canadian agricultural exports to the United Kingdom could even see a post-Brexit boost. There is also opportunity for Canada and the UK to work together under the agreement to access third party markets. CPTPP goes further than continuity agreement on global supply chains and how countries accumulate, export and reimport goods.
  • The United Kingdom is no longer under the EU’s common agricultural policy. To determine the post-Brexit policy direction, the UK Secretary of State for International Trade established the Trade and Agricultural Commission. The first report from the commission includes 22 recommendations related to liberalizing agri-food trade, climate, animal welfare, and sanitary and phytosanitary (SPS) standards. The UK is committed to a scientific approach as it listens to stakeholders on the path forward. This move suggests there will be opportunity for stakeholders to at least make a case for Genetically Modified Organisms (GMOs) but no guarantees on whether it will be included in policy.
  • Canadian companies with subsidiaries in the UK who used the country as an access point to the EU have concerns about loss of access in the last mile. As with any change, disruption is expected but so far is minimal. For those at headquarters in Canada experiencing friction or difficulty, contact Andy Barr. For those subsidiaries based in the UK, contact counterparts in London. Businesses are also encouraged to contact the Canadian Trade Commission as well. It is important to note that not all who do business in London are moving on to the EU and the commonalities between the UK and Canada still make the UK one of the first places Canadian businesses look for opportunity.
  • For research and development, there are also opportunities both in the EU and in the UK. In the EU, Canada has announced it will put $50 million aside over next five years for joint research and roughly a billion into a supercluster initiative with the EU. The UK announced it would review tax relief for research and development and has projects also available for bid.
  • On climate, the UK will host the 26th UN Climate Change Conference of the Parties (COP26) which will be six years after the Paris agreement. The UK just received the Dagupta review, which looks at how the economy and environment can work together and should mainstream environmental thought into the economic decisions the government makes. Post-COP26, there could be opportunities for Canada and the UK to collaborate on the objectives and explore commercial opportunities together.

– Stephany Laverty is a Policy Analyst with the Canada West Foundation