International Trade Minister Mary Ng is expected to introduce legislation this afternoon to implement Canada’s new transitional trade agreement with the United Kingdom, but it’s unlikely to become law before the government’s Dec. 31 deadline.
Global Affairs Canada is preparing to release the legal text of the agreement to coincide with the bill’s introduction, followed by briefing sessions for business groups and other stakeholders to offer a more complete picture of what’s in store than was presented when the two countries announced they’d reached a deal on Nov. 21.
As of Jan. 1, the current rules governing trade between Canada and the U.K. will expire, as Brexit takes hold and the British government assumes full responsibility for its trade policy independent from the European Union.
The trade minister has promised to work with her U.K. counterpart to mitigate any short-term effects of not having the new measures in place.
Until now, trade with the U.K. was liberalized under the terms of the Comprehensive Economic and Trade Agreement (CETA). While not yet fully ratified by all of the EU’s member states, the bulk of CETA’s measures took effect in 2017.
Had no deal been reached to cover future two-way trade with Canada, new tariffs and other restrictions could have hit Canadian and British businesses this winter.
Instead, the new deal temporarily “rolls over,” or replicates, most of CETA’s terms for the immediate future, allowing both countries more time to consider what kind of arrangements they want to have in place permanently.
However, the new implementation bill is unlikely to pass before the end of the year. The House of Commons is scheduled to rise for its holiday break on Friday.
‘Working to ensure no disruptions’
Ng has downplayed the risk of not having the transitional agreement fully ratified and ready to implement in the new year.
However, the Canadian government has not released any details of interim measures it’s working on with the British government to avoid new trade barriers disrupting the two-way trade in goods, services and investment with its fifth-largest trading partner. For example, the two sides could reach an understanding not to collect tariffs otherwise payable on each other’s products until the implementation legislation is passed.
“I want businesses to know that is my absolute top priority, making sure they get that predictability heading to the end of the year,” Ng said after the cabinet met on Monday, adding that the transitional deal “maintains the high standards we have in CETA.”
“We’re absolutely working to ensure there is no impact or disruptions for our businesses,” she said.
WATCH | What we know about the interim Canada-U.K. trade deal:
Both countries have committed to start negotiating a more permanent, comprehensive trade deal in the new year.
There is no sunset date for the terms of the transitional deal, but parliamentarians on the Commons trade committee have been told that the text of the deal says the two parties intend to conclude their bilateral negotiation by 2024.
According to federal government policy, trade treaties are supposed to be tabled in Parliament 21 sitting days before implementation legislation — a bill changing laws and regulations to comply with the new agreement — is introduced for debate.
That policy does not seem set to be applied for this Canada–U.K. transitional deal.
Ratification of trade agreements is the responsibility of the federal cabinet. It’s unclear if Prime Minister Justin Trudeau’s cabinet has officially signed off on the terms of this transition deal, to the extent that they may deviate from the CETA arrangements already in place.
When implementation legislation for the revised North American trade agreement was rushed through Parliament last spring, the Trudeau government agreed to Opposition demands that it engage in a more comprehensive consultation process for future trade deals. That process also has yet to be followed.