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Minister of Small Business, Export Promotion and International Trade appearance before the House Standing Committee on International Trade on Bill C-18 second reading: An act to implement Canada-U.K. Trade Continuity Agreement (TCA)

2021-02-19

Table of contents

Standing Committee on International Trade (CIIT)

43rd Parliament – Second Session

September 23, 2020 to Present

Chair

Hon. Judy Sgro (Liberal – Ontario)

Vice-Chair

Tracy Gray (Conservative – British Columbia)

Simon-Pierre Savard-Tremblay (Bloc Québécois – Québec)

Members

Daniel Blaikie (NDP – Manitoba)

Randy Hoback (Conservative – Saskatchewan)

Ben Lobb (Conservative – Ontario)

SU.K.h Dhaliwal (Liberal – British Columbia)

Ziad Aboultaif (Conservative –Alberta)

Randeep Sarai (Liberal – British Columbia)

Rachel Bendayan (Liberal – Québec)
Parliamentary Secretary to the Minister for Small Business, Export Promotion and International Trade

Chandra Arya (Liberal – Ontario)

Terry Sheehan (Liberal – Ontario)
Parliamentary Secretary to the Minister of Economic Development and Official Languages (FedNor)

Order for Questioning:

The time allotted for the questioning of witnesses in the first round be as follows: Conservative Party – six (6) minutes, Liberal Party – six (6) minutes, Bloc Quebecois – six (6) minutes, New Democratic Party – six (6)  minutes; that the order and time allotted for the questioning of witnesses in the second round be as follows: Conservative Party – five (5) minutes, Liberal Party – five (5) minutes, Bloc Quebecois – two and a half (2.5) minutes, New Democratic Party – two and a half (2.5) minutes, Conservative Party five (5) minutes, Liberal Party five (5) minutes. If time permits, further rounds shall repeat the pattern of the first two at the discretion of the Chair.

Witnesses typically have 10 minutes each for their opening remarks, but the Chair will often request witnesses to keep opening remarks to 5 minutes if appearing alongside other witnesses providing opening remarks.

Mandate:

The House of Commons Standing Committee on International Trade studies and reports on matters referred to it by the House of Commons. The Committee can also initiate studies of subjects falling within its mandate. As a permanent committee established by the Standing Orders of the House of Commons, the Committee may be asked to comment on legislation, departmental activities and spending, and other matters under its jurisdiction. The Compendium of the House of Commons Procedure contains additional information on the mandate and powers of standing committees.

The general subject area of the Committee includes the following:

The federal departments and agencies under the Committee’s direct scrutiny are:

Hon. Judy Sgro Chair (lPC—Humber River-Black Creek, ON)

Key interests

Parliamentary roles

Sgro has served as a Member of Parliament since 1999. She served as Parliamentary Secretary to the Minister of Public Works and Government Services in 2003, and as Minister of Citizenship and Immigration from 2003 to 2005. She has served as Critic of many portfolios, including Industry, Status of Women, Veterans Affairs and National Revenue. In the previous parliament, Sgro served as Chair of the Standing Committee on Transport, Infrastructure and Communities.

Notable committee memberships

Background

Prior to entering federal politics, Sgro served in municipal politics as part of the North York City Council and the Toronto City Council, starting in 1987. At the municipal level, Sgro focused on poverty and crime reduction.

Tracy Gray 鈥�疺ice-Chair (CPC—Kelowna-Lake Country, BC)鈥�

Critic for Export Promotion and International Trade鈥�

Key interests

Parliamentary roles

Gray鈥痺as named鈥痶he Conservative Critic for鈥疎xport Promotion and鈥疘nternational Trade鈥痓y Leader Erin O’Toole on September鈥�8, 鈥�2020.鈥疭he鈥痟ad鈥痯reviously served鈥痑s the鈥疌ritic for Interprovincial鈥疶rade.鈥��

Notable committee membership

Background

Gray defeated the Liberal incumbent in the 2019 General election, where she had been鈥痑 Kelowna city councillor 2014-2018. Prior to entering鈥痯olitics, Gray had extensive experience in the BC Liquor industry. In 2003 she introduced a chain VQA wine stores to the BC interior鈥痑nd she has鈥痚xperience managing several wineries and breweries in the Okanagan Valley.鈥�

Recent trade-related statements

Simon-Pierre Savard-Tremblay Vice-Chair (BQ—Saint-Hyacinthe-Bagot, QC)

Critic for International Trade

Key interests

Parliamentary roles

Savard-Tremblay currently serves as the Bloc Quebecois critic for International Trade and Industry.

Notable committee membership

Background

Prior to entering politics, Savard-Tremblay worked as an academic, author and columnist. He has a bachelors degree in political science from the University of Montreal, a Masters in Sociology from the University of Quebec at Montreal, and a doctorate in the social economy of development from the École des hautes études en sciences sociales in Paris. He was heavily involved in the youth forum of the BQ and has been a frequent commentator in Quebec on economic and sovereignty-related issues. In his academic work, he is critical of neoliberalism and globalization.

Recent trade and SME related statements

Daniel Blaikie (NDP—Elmwood-Transcona, MB)

critic for International Trade

Key interests

Parliamentary roles

Blaikie was first elected in 2015. Blaikie is currently the NDP Critic for Democratic Reform, Employment, Workforce Development and Disability Inclusion, Export Promotion and International Trade and Western Economic Diversification, as well as the deputy critic for Finance. He has previously served as the Critic for Public Services and Procurement, Deputy Critic for Ethics, and as NDP Caucus Chair.

Notable committee memberships

Background

Prior to entering politics, Blaikie worked as an electrician. He has served on the Manitoba Apprenticeship and Certification Board and the Winnipeg Labour Council.

Recent trade related statements

Randy Hoback (CPC—Prince Albert , SK)

Critic for International Trade

Key interests

Parliamentary roles

Hoback currently chairs the Conservative Saskatchewan Caucus. He has served previously as the critic for International Trade and the critic for Canada-US Relations. He also served as President of the Canadian Section of ParlAmericas starting in 2010, and as President of ParlAmericas at the hemispheric level from 2011 to 2014.

Notable committee membership

Background

Hoback was first elected in 2008, and has been re-elected in his Prince Albert riding in each of the 2011, 2015 and 2019 elections. Prior to entering politics, Hoback worked in the farm equipment manufacturing industry before taking over his family farm. He has a business administration certificate from the University of Saskatchewan and a Chartered Director’s designation from McMaster University.

Recent trade related statements

Ben Lobb (CPC—Huron-Bruce, Ontario)

Key Interests

Parliamentary roles

Lobb was a member of multiple Parliamentary Associations and Interparliamentary Groups between 2009 and 2016. Some of these groups included the Canada-China Legislative Association (CACN), the Canadian NATO Parliamentary Association (CANA), the Canada-United States Interparliamentary Group (CEUS), and the Canadian Branch of the Commonwealth Parliamentary Association (CCOM).

Notable committee memberships

Background

Lobb was first elected to the House of Commons in 2008. He was re-elected in 2011, 2015, and 2019. Lobb attended Lee University in Cleveland, Tennessee where he earned a BSc in Business Administration.

Recent trade related statements

Ziad Aboultaif (CPC—Edmonton Manning, Alberta)

Key interests

Parliamentary roles

MP Aboultaif was the Conservative Critic for digital government from November 2019 to September 2020. He had previously served as the Critic for International Development and the Critic for National Revenue.

Notable committee membership

Background

Aboultaif was first elected in 2015 and campaigned on a pledge to support small businesses and to support pipeline development. Prior to entering politics, Ziad was a self-employed business owner working in logistics and distribution.

Recent trade-related statements

Rachel Bendayan (LPC—Outremont, QC)

Parliamentary Secretary to the Minister of Small Business, Export Promotion and International trade

Key interests

Parliamentary roles

Bendayan was first elected in a by-election in February 2019. She is currently the Parliamentary Secretary to the Minister of Small Business, Export Promotion and International Trade.

Notable committee memberships

Background

Before entering politics, Bendayan was a lawyer with Norton Rose Canada in Montreal. She ran for the Liberal Party in Montreal in 2015, losing to Thomas Mulcair. After the election, she was hired as the chief of staff to the former Minister of Small Business and Tourism Bardish Chagger.

Recent trade related statements

SU.K.h Dhaliwal (LPC—Surrey – Newton, BC)

Key interests

Parliamentary roles

Dhaliwal has served in Parliament twice, first representing the riding of Newton-North Delta from 2006- 2011, then for the riding of Surrey-Newton from 2015 to present. During his previous tenure as a Member of Parliament, he served as critic for the Asia Pacific Gateway, Sport and Western Economic Diversification Canada.

Notable committee membership

Background

Dhaliwal was born in India, coming to Canada in 1984. Prior to entering politics, Dhaliwal founded a successful land-survey company in Surrey. He has been very involved in the business community and in municipal affairs in Surrey, serving on many local boards and fundraising campaigns.

Recent trade related statements

Chandra Arya (LPC—Nepean, ON)

Key interests

Parliamentary roles

Arya was first elected in 2015. He is a member of virtually all of the interparliamentary associations.

Notable committee memberships

Background

Arya spent his career prior to entering politics as an executive in the high-technology sector. He has a Bachelor degree in Engineering and a Masters in Business Administration. Arya was active in the Ottawa business community, serving on the board of Invest Ottawa and as Chair of the Indo-Canada Ottawa Business Chamber. He was also active in social causes, serving on the board of the Unity Non-Profit Housing Corporation Ottawa and as Vice President of the Ottawa Community Immigrants Services Organization.

Recent trade related statements

Randeep Sarai (LPC—Surrey Centre, BC)

Key interests

Parliamentary roles

Sarai was first elected in 2015. In the previous parliament, he served as the chair of the Liberal Pacific and Northern Caucus. He has also been a member of many interparliamentary associations.

Notable committee memberships

Background

Sarai is a lawyer by training, with experience in real estate development and urban planning. He has a Bachelors degree from the University of British Columbia, majoring in political science, and a Bachelor of Laws degree from Queen’s University. He has served on the boards of a number of community organizations dedicated to combatting youth violence in Surrey.

Recent trade related statements

Terry Sheehan (LPC—Sault Ste. Marie, ON)

Parliamentary Secretary to Minister of Economic Development

Key interests

Parliamentary roles

Sheehan was first elected in 2015. He was elected co-chair of the All Party Steel Caucus in the previous Parliament. He has been the Parliamentary Secretary to the Minister of Economic Development since November 2019.

Notable committee memberships

Background

Prior to entering politics, Sheehan had a career in the private and public sectors in business, community and economic development. His last position prior to being elected as a Member of Parliament was as an employment and training consultant for the Ontario Minister of Training, Colleges and Universities. His riding is home to Algoma Steel and Tenaris

Private Members’ Motion

In the 42nd Parliament Sheehan submitted a concerning the importance of the Canadian steel industry and the creation of a National Steel Procurement Strategy.

Appearance before the House Standing Committee on International Trade (CIIT) on C-18, the Canada-U.K. TCA Implementation ACT

February 22, 2021

Meeting scenario

Committee membership & interests

Committee work

Canada-U.K. trade continuity agreement questions and answers

On the TCA and a future FTA…

How exactly is the Canada-U.K. TCA good for Canadians?

How is this agreement different from CETA?

Does this agreement affect Canada’s trade with the EU, and CETA?

What is meant by the transitional nature of the Canada-U.K. TCA?

What provisions in the Canada-U.K. TCA will help ensure Canada and the U.K. return to the table to negotiate a new FTA?

Did Canada concede anything on dairy (cheese) or any other supply-managed industries?

Is Canada’s sovereignty threatened by the TCA?

Does the TCA replicate CETA’s progressive trade elements?

For how long will the Canada-U.K. TCA be in place?

Doesn’t this agreement just replicate the same problems in CETA?

How will you get Canadians to take advantage of the Canada-U.K. TCA or a future U.K. FTA, when so few are using CETA?

When will future comprehensive FTA negotiations begin?

On the process…

What arrangements are in place to continue uninterrupted trade with the U.K. until the Canada-U.K. TCA comes into force?

Why did Canada not negotiate a new FTA with the U.K. from the start of Brexit?

Why was the Trade Dialogue paused in 2019?

Why did other countries not pause their own discussions with the U.K. in 2019?

Why did Canada reengage in discussions with the U.K. (only) in summer 2020?

Why did these TCA negotiations not follow the normal, more transparent process for trade negotiations? Were Canadians consulted?

Were the provinces and territories consulted? What are their views?

What is a comprehensive FTA?

What prevented the Government from following the amended Policy on Tabling of Treaties in Parliament for the TCA negotiations?

How will the amended Policy be implemented?

Other issues: Brexit, CPTPP, Good Friday Agreement

Is Canada impacted by the new EU and U.K. Trade and Cooperation Agreement?

What assistance is the Government providing Canadian businesses in the aftermath of Brexit?

How does the Canada-U.K. TCA intersect with the U.K.’s interest in the CPTPP?

Is U.K. membership in the CPTPP conditional on concluding a future Canada-U.K. free trade agreement?

Is a future Canada-U.K. trade agreement conditional on upholding the Good Friday Agreement?

United Kingdom Trade Continuity Remission Order Qs and As

1. Why is the Remission Order necessary?

2. What is covered under the Remission Order?

3. Why does the Remission Order reference the Comprehensive and Economic Trade Agreement (CETA) with the EU rather than the Trade Continuity Agreement (TCA) with the United Kingdom?

4. How does the importer claim the Remission Order?

5. Will using the Remission Order create more paperwork for importers?

6. Which goods are covered by the Remission Order?

7. Can the importer claim a refund on an importation of a good that would have qualified for the Remission Order?

8. When will the TCA come into force?

9. Will the TCA be permanent?

Canada-United Kingdom Trade Continuity Agreement Summary

In the Canada-United Kingdom (U.K.) Trade Continuity Agreement (CUKTCA), Canada and the U.K. have substantively replicated CETA, modifying that agreement only as necessary for it to suit a bilateral context. The CETA is incorporated by reference in a Short Form Treaty and necessary modifications to the CETA are detailed in a Short Form Treaty annex.

Short Form Treaty

The Short Form Treaty incorporates the CETA by reference as the starting point for the CUKTCA. A Canada-U.K. Joint Committee, modelled on CETA, is established. A Retained Law provision notes that references to EU law in the CUKTCA are to be understood as references to EU law as incorporated into U.K. domestic law at the end of the Brexit transition period and provides recourse to urgent consultations if the U.K. decreases the conformity of a measure with the CUKTCA. A Subsequent Negotiations provision commits the Parties to enter into negotiations on a new FTA within one year of the CUKTCA’s entry into force, which the Parties seek to conclude within three years of the CUKTCA’s entry into force.

Chapter 1 – General Definitions and Initial Provisions

The CUKTCA includes several chapters which set out institutional and administrative provisions that apply to the entire Agreement. These provisions establish the framework by which the Agreement will be interpreted, managed and implemented.

Chapter 2 – National treatment and market access for goods

Comprehensive market access for goods is at the cornerstone of any free trade agreement. This access is achieved by a commitment of the signatory Parties to lower or eliminate tariffs, to not apply restrictions or prohibitions on the import or export of goods, and to treat imported products no less favorably than similar goods produced domestically. Such commitments are contained in the National Treatment and Market Access for Goods (NTMA) chapter. There are no substantive changes to the CETA NTMA chapter text in the CUKTCA, and 100% of the CETA tariff elimination commitments are carried forward. The CUKTCA fully protects Canada’s dairy, poultry and egg sectors, and provides no new incremental market access for cheese or any other supply-managed products. A handful of goods (certain agricultural and fish and seafood goods) subject to tariff rate quotas under CETA were also carried over with new volumes that are the result of a negotiated outcome. Under CETA, beef, pork and wheat TRQs are administered under a licencing system that the U.K. was unable to replicate in the CUKTCA. Instead, beef, pork and wheat TRQs will be administered on a first-come, first-served basis under the CUKTCA. This outcome provides streamlined access to the U.K. market that reduces red-tape and paperwork. The CUKTCA allows for an optional return to a licensing system if both parties agree.

Chapter 3 – Trade Remedies

The Trade Remedies chapter’s provisions accomplish three main objectives: ensuring that trade remedies are applied transparently, ensuring due consideration of public interest in imposing anti-dumping or countervailing duties, and ensuring that safeguards are applied in the least trade distorting manner possible.

Chapter 4 – Technical Barriers to Trade

Under the World Trade Organization (WTO) Agreement on Technical Barriers to Trade (TBT Agreement), the Parties have already made a number of commitments with respect to the preparation, adoption and application of technical regulations, standards, and conformity assessment procedures, to avoid implementing measures that act as unnecessary obstacles to international trade. The TBT chapter incorporates and builds on the key provisions of the WTO TBT Agreement and sets out provisions that help prevent and address disruptions created by regulations and associated testing or certification requirements.

Chapter 5 – Sanitary and Phytosanitary Measures (SPS)

The Chapter on Sanitary and Phytosanitary Measures (SPS) affirms and builds upon the World Trade Organization (WTO) Agreement on the Application of Sanitary and Phytosanitary Measures. The Chapter maintains each Party’s right to take the SPS measures necessary to protect against risks to food safety, animal or plant life or health, while requiring that such measures be science-based, transparent, and applied only to the extent necessary to protect human, animal or plant life, so as not to create unnecessary and unjustifiable SPS-related trade restrictions. Canada and the U.K. also committed, through parallel exchanges of letters, to work together on issues of relevance to trade in the meat sector and for biotechnology products with a view to facilitate trade.

Chapter 6 – Customs and Trade Facilitation

The Customs and Trade Facilitation Chapter seeks to ensure that effective and efficient border measures expedite the movement of goods, while measures to ensure national safety and security are also maintained. The chapter complements similar commitments the Parties have undertaken under the auspices of the WTO and the World Customs Organization (WCO).

Chapter 7 – Subsidies

Comprehensive commitments between the Parties and other trading partners are set out in the WTO Agreement on Subsidies and Countervailing Measures, and the WTO Agreement on Agriculture. Because subsidies have a potential impact on all trading partners, Canada believes that the WTO is the venue best suited to strengthen disciplines on their appropriate use. All subsidies provided within Canada, with the exception of those relating to cultural industries, are subject to the subsidies chapter of this agreement. Provisions covering exchange of information and notifications between the Parties will encourage enhanced transparency.

Chapter 8 – Investment

Trade in investment is distinct from the trade in goods or in services, and operates under distinct rules. As in the CETA, the CUKTCA incorporates a dedicated chapter to facilitate increased investment between the Parties. The Investment Chapter is designed to give investors greater certainty, stability, transparency, and protection for their investments, and to secure access for both Parties investors to each other’s respective markets. As the investment dispute resolution provisions are not part of CETA provisional application, Canada and the U.K. agreed to suspend these provisions pending a review by both Parties.

Chapter 9 – Cross-Border Trade in Services (CBTS)

As in the CETA, provisions of the CBTS Chapter form the foundation for the liberalization of the services market under the agreement. In addition to the application of national treatment and MFN obligations, the chapter establishes the scope for services market access under the agreement. Importantly, coverage is defined through a negative list approach. That is, all services are covered by the obligations of the agreement unless explicitly indicated otherwise. CUKTCA maintains for Canadian service suppliers market access into the U.K. that is among the best it has ever granted to a trading partner. This means that Canadian suppliers in most service sectors remain on an equal footing with U.K. service providers, and receive better treatment than most of their non-U.K. competitors.

Chapter 10 – Temporary entry and stay of natural persons for business purposes

The Temporary Entry Chapter of CETA, which addresses administrative requirements such as economic needs tests that can impose time delays and administrative costs on prospective business entrants, has been replicated in the CUKTCA. Provisions of the chapter are aimed at increasing transparency and predictability of these requirements. In the area of Contract Service Suppliers and Independent Professionals, commitments taken by the U.K. represent preferential access for Canada, meaning that Canadians benefit from better access into the U.K. than what is generally available to its other trading partners

Chapter 11 – Mutual recognition of professional qualifications

The Mutual Recognition of Professional Qualifications (MRPQ) Chapter replicates a detailed framework that streamlines the process for the negotiation of mutual recognition agreements (MRAs) recognized between the Parties regulators and/or professional bodies.

Chapter 12 – Domestic regulation

The objectives of the Domestic Regulation chapter are to ensure that licensing and qualification requirements and procedures are transparent, objective, fair, and timely. The replicated provisions apply to the framework for licensing - ensuring that requirements are clear, publically available, and based on objective criteria – and also to procedures, ensuring that the consideration of an application and the granting of a permission are timely and non-arbitrary.

Chapter 13 – Financial services

The Financial Services chapter, as replicated from CETA, applies to measures adopted or maintained by the Parties relating to financial institutions, investors and their respective investments in financial institutions, and cross-border trade in financial services. The chapter tailors the general commitments in the agreement to the financial services sector. In addition to national treatment, most-favoured-nation treatment and market access obligations, the chapter includes specific commitments on regulatory transparency and the cross-border transfer and processing of information by financial institutions.

Chapter 14 International maritime transport services

This article replicates CETA provisions that government measures affecting the IMTS sector are subject to the provisions of the agreement’s Investment and Cross-Border Trade in Services (CBTS) chapters, including obligations not to maintain discriminatory measures with respect to accessing and using ports, and the use of infrastructure and services of ports.

Chapter 15 – Telecommunications

The Telecommunications Chapter, replicated from CETA, is composed of provisions related to the use of public telecommunications networks, as well as to the physical and procedural aspects of network management. The Chapter also seeks to maintain enhanced regulatory certainty for telecommunications service suppliers by including disciplines to ensure that telecommunications regulators act impartially, objectively and in a transparent fashion. In this way, the Chapter supports Canadian telecommunications service suppliers and investors by making the regulatory environment for telecommunications services more predictable and competitive.

Chapter 16 – Electrical commerce

The Electronic Commerce chapter, as replicated from CETA, includes measures to protect personal information and to facilitate cooperation on issues such as the treatment of spam and protection from fraudulent and deceptive commercial practices. The Chapter also includes a commitment to maintain the current framework of not applying customs duties on digital products transmitted electronically as a means to further enhance the transparent and predictable regulatory framework of electronic commerce.

Chapter 17 – Competition policy

As in CETA, the purpose of the Competition Policy Chapter is to ensure that the benefits of trade liberalization under the agreement are not offset by anticompetitive business conduct. While the agreement’s approach recognizes the independence of each Party to enforce its domestic competition legislation in the ways it sees fit, the chapter provides a framework which ensures that each Party has in place a transparent, non-discriminatory and fair enforcement regime to counter specific types of anticompetitive practices.

Chapter 18 – State enterprises, monopolies and enterprises granted special rights or privileges

As in CETA, the agreement acknowledges the right of governments to establish monopolies or state enterprises to further specific public policy objectives, but also seeks to ensure that they do not unduly hamper the free flow of trade. Accordingly, the Monopolies and State Enterprises Chapter maintains rules and disciplines for state enterprises to protect the market from any trade distortions that might arise from their interaction with private enterprises.

Chapter 19 – Government procurement

As Parties to the World Trade Organization Agreement on Government Procurement (GPA), Canada and the U.K. have already committed to treat goods, services and suppliers of the other Party in a fair, transparent and non-discriminatory manner. The CUKTCA replicates the procedural rules and market access commitments that Canada and the U.K. have agreed to in the CETA GP Chapter. As was the case in CETA, Canada and the U.K. have also agreed to establish by September 21, 2022 individual electronic single point of access (SPA) for procurement notices covered under the CUKTCA, including at the sub-central level. The SPAs will provide Canadian and U.K. businesses with one-stop-shop to quickly retrieve information about all bid opportunities that are covered under the CUKTCA.

Chapter 20 – Intellectual property rights

The Intellectual Property Rights (IPR) Chapter, as replicated from CETA, promotes effective protection for the Parties IPR holders, through specific commitments for copyright and related rights, trademarks, designs, patents, geographical indications, plant varieties, as well as IPR enforcement measures and cooperation between the Parties.

Chapter 21 – Regulatory cooperation

The Regulatory Cooperation Chapter, as replicated from CETA, maintains strengthened cooperation in regulatory matters to promote forward-looking, early engagement between the Parties as new measures are being developed. By facilitating earlier access to regulatory development processes under the CUKTCA, it is expected that the differences in regulatory approaches between the Parties will be reduced over time, resulting in fewer barriers to trade when regulations are implemented.

Chapter 22 – Sustainable development

The Trade and Sustainable Development chapter – as replicated from CETA, in concert with the Trade and Labour and Trade and Environment chapters of that agreement, reflects the Parties’ shared values in recognizing that economic, social, and environmental objectives are mutually supportive and reinforcing. By maintaining shared commitments, this Chapter helps to ensure economic growth under the agreement does not occur at the expense of other important social and environmental objectives.

Chapter 23 – Trade and labour

Canada views the pursuit of liberalized trade and the promotion and protection of labour rights as mutually reinforcing and equally important. In that sense, replication of CETA commitments in the CUKTCA with respect to labour provides assurances that high standards of labour protection will be maintained as bilateral trade increases with the

U.K. CUKTCA’s labour chapter contains comprehensive labour rights obligations and confirms the importance of effectively enforcing domestic labour legislation. Canada and the U.K. have also committed to uphold health and safety at work, acceptable minimum employment standards, and non-discrimination in respect of working conditions, particularly for migrant workers.

Chapter 24 – Trade and environment

Canada is firmly committed to the principle that trade and environmental protection should be mutually supportive. For this reason, replication of CETA commitments in the CUKTCA with respect to environment provides assurances that trade and environmental protection are mutually reinforcing and equally important, and that the increased prosperity resulting from liberalized trade does not occur at the expense of environmental protection. The objectives of the Trade and Environment Chapter, as replicated from CETA, ensure that both Canada and the U.K. pursue high levels of environmental protection while realizing the benefit of liberalized trade. As in CETA, the Chapter contains commitments for Parties to effectively enforce domestic environmental laws, and cooperate to address global environmental issues such as climate change, multilateral environmental agreements, and sustainable fisheries and sustainable forestry.

Chapter 25 – Bilateral cooperation and dialogues

The Dialogues and Bilateral Cooperation chapter is replicated from CETA and draws on established partnerships and common interests between Canada and the U.K. in a number of areas. The chapter sets out provisions through which Canada and the U.K. commit to engagement in the areas of biotechnology, forestry, raw materials, and science and technology.

Chapter 26 – Administrative provisions

The Administrative and Institutional Provisions chapter of the CUKTCA defines how the agreement will be jointly managed and implemented by the Parties. The chapter establishes the structure and processes of the various committees, each of which play an important role in administering the agreement. This area is important in providing the administrative and institutional context that allows the agreement to be interpreted and applied in a consistent manner.

Chapter 27 – Transparency

The Transparency chapter constitutes part of the institutional framework for the CUKTCA as a whole. The provisions of the chapter are designed to facilitate cooperation between the Parties in the area of information sharing, and to ensure administrative proceedings are fair and just. In addition, the chapter helps ensure that Canadian and U.K. stakeholders are either notified of, or have access to information regarding measures that may affect trade under the CUKTCA.

Chapter 28 – Exceptions

The exceptions chapter sets out commitments made between Canada and the U.K. to exclude certain areas from the CUKTCA, usually for reasons of national interest. For example, the Agreement does not prevent a Party from taking action to protect its national security interests. Some of the exceptions are applicable to the entire Agreement while others only apply to certain chapters. Generally, these exceptions are designed to ensure that Canada and the U.K. maintain the right to take action in the public interest. The Chapter also sets out where Canada or the U.K. may impose measures that would otherwise be inconsistent with the CUKTCA obligations to pursue certain policy objectives.

Chapter 29 – Dispute settlement

As in CETA, the CUKTCA dispute settlement mechanism applies to any disagreement pertaining to the interpretation or application of the agreement, unless stated otherwise. The chapter emphasizes the importance of resolving disagreements through cooperative means, recognizing that formal dispute settlement processes can be time consuming and resource intensive. Accordingly, the chapter contains provisions regarding consultation and mediation, which improve flexibility in resolving trade disputes, and helps ensure that formal dispute settlement is used only as a last resort.

Chapter 30 – Final provisions

The Final Provisions chapter provides the legal language needed to bring the CUKTCA into force. It also includes provisions for amendments to the text and processes for termination, should Canada or the U.K. wish to withdraw from the agreement.

Protocol on rules of origin and origin procedures

Canadian exporters will have clear and favourable rules that take into consideration Canada’s supply chains to determine which goods are considered originating in Canada and therefore eligible for preferential tariff treatment. The CUKTCA largely replicates the CETA rules of origin. The agreement allows for accumulation with the EU on a transitional basis for 3 years. This means that materials sourced from the EU that are used in the production of goods in Canada or the U.K. can continue to count toward the originating status of those goods for purposes of Canada-U.K. trade. CUKTCA Origin Quotas reflect volumes negotiated on a bilateral basis, also subject to the 3-year transitional timeframe.

Similar to the CETA, CUKTCA’s Origin Procedures establish common approaches for importers, exporters, and customs authorities with regard to areas such as certification of origin, record keeping, and origin verification. Accordingly, the chapter clarifies the processes necessary for importers and exporters to take full advantage of the Agreement, while at the same time providing customs authorities with an applicable methodology to ensure that only qualifying goods enjoy the benefits of CUKTCA.

Protocol II: mutual acceptance of the results of conformity assessment

Not all jurisdictions are alike in terms of the manner in which they apply conformity assessment procedures. This can impose additional costs and delays for producers who wish to export. The CUKTCA Protocol on Conformity Assessment replicates CETA

provisions to address these issues by creating a framework for Canadian businesses to bring certain products to the U.K. market without needing to have their products tested twice. The Protocol achieves this by establishing a mechanism through which Canadian conformity assessment bodies in certain product categories can test products to certify their conformity with U.K. technical regulations, and have that certification recognized and accepted in the U.K.

Protocol III: good manufacturing practices for pharmaceutical products

As with CETA, the Protocol’s central objective is to reduce the number of duplicative visits and certification requirements faced by pharmaceutical manufacturers that sell their products in both Canada and the U.K. As a result of the mutual recognition achieved under the Protocol, regulators in the U.K. will be able to rely on the certifications granted by Canadian regulators for certain products, and vice versa.

Wine and spirits

Under the CUKTCA, Canada and the U.K. replicated a number of commitments that work to ensure both the continued strength of this important industry, and that it benefits from more liberalized trade. The CUKTCA’s wines and spirits provisions, as in CETA, set out in an Annex to the Initial Provisions Chapter, incorporate and build upon both the 2003 Agreement between Canada and the European Community on Trade in Wines and Spirits Drinks and the 1989 Agreement between the European Economic Community and Canada concerning trade and commerce in alcoholic beverages.

The CUKTCA reaffirms the national treatment and non-discrimination commitments of the 2003 Agreement, while also maintaining a number of exceptions that reflect the unique character of the sale of wines and spirits in Canada. Specifically, Canadian wineries and distilleries retain the authority to sell only their own products on-site; Ontario and British Columbia are allowed to continue operating stores that sell only their own products; and Quebec may also continue to require all wine sold in grocery and convenience stores to be bottled in-province. Liquor boards are also required to not use the monopoly position they hold in their home jurisdiction to engage in activities that have an anti-competitive effect in other markets.

Annex – CUKTCA replication of ceta

Technical changes are, for example, converting mentions in the text from EU to U.K., removing EU Member State-specific commitments

Chapter 1 – General Definitions and Initial ProvisionsReplicated with technical changes.
Chapter 2 – National Treatment and Market Access for GoodsReplication of NTMA chapter, with the exception of TRQ administration and the volumes for products subject to CETA TRQs (see Annex B for volumes). The CUKTCA also fully protects Canada’s dairy, poultry and egg sectors, and provides no new incremental market access for cheese or any other supply-managed products.
Chapter 3 – Trade RemediesReplicated with technical changes.
Chapter 4 – Technical Barriers to TradeReplicated with technical changes.
Chapter 5 – Sanitary and Phytosanitary Measures (SPS)Replicated with technical changes.
Chapter 6 – Customs and Trade FacilitationReplicated with technical changes.
Chapter 7 – SubsidiesReplicated with technical changes.
Chapter 8 – InvestmentReplicated with technical changes. The ISDS mechanism is suspended pending a review between the parties.
Chapter 9 – Cross- Border Trade in ServicesReplicated with technical changes.
Chapter 10 – Temporary EntryReplicated with technical changes.
Chapter 11 – Mutual Recognition of Professional QualificationsReplicated with technical changes.
Chapter 12 – Domestic RegulationReplicated with technical changes.
Chapter 13 – Financial ServicesReplicated with technical changes.
Chapter 14 International Maritime Transport ServicesReplicated with technical changes.
Chapter 15 – TelecommunicationsReplicated with technical changes.
Chapter 16 – Electrical CommerceReplicated with technical changes.
Chapter 17 – Competition PolicyReplicated with technical changes.
Chapter 18 – State Enterprises, Monopolies and Enterprises Granted Special Rights or PrivilegesReplicated with technical changes.
Chapter 19 – Government ProcurementReplicated with technical changes.
Chapter 20 – Intellectual PropertyReplicated with technical changes.
Chapter 21 – Regulatory CooperationReplicated with technical changes.
Chapter 22 – Sustainable DevelopmentReplicated with technical changes.
Chapter 23 – Trade and LabourReplicated with technical changes.
Chapter 24 – Trade and EnvironmentReplicated with technical changes.
Chapter 25 – Bilateral Cooperation and DialoguesReplicated with technical changes.
Chapter 26 – Administrative ProvisionsReplicated with technical changes.
Chapter 27 – TransparencyReplicated with technical changes.
Chapter 28 – ExceptionsReplicated with technical changes.
Chapter 29 – Dispute SettlementReplicated with technical changes.
Chapter 30 – Final ProvisionsReplicated with technical changes.
Rules of Origin and Origin Procedures ProtocolU.K. ability to cumulate with EU on a transitional basis (ends after three years). Negotiated Origin Quota volumes for Canadian exports on a transitional basis (end after three years). Origin Procedures were replicated with technical changes.
Protocol II: Mutual Acceptance of the Results of Conformity AssessmentReplicated with technical changes.
Protocol III: Good Manufacturing Practices for Pharmaceutical ProductsReplicated with technical changes.
Wine and SpiritsReplicated with technical changes.

Canada-united Kingdom trade continuity agreement highlights

What is it?

What the Trade Continuity Agreement means for business

Continued opportunities for goods exporters: The CUKTCA provides Canadian exporters with continued preferential access to the U.K. market and includes immediate elimination of 98% of tariffs on Canadian exports to the U.K. (carried over from CETA), and the elimination of an additional 1% of tariffs on Canadian exports to the U.K. by January 1, 2024 – bringing the total to 99% of tariffs on Canadian exports.

Continued opportunities for services: For Canadian service suppliers, the CUKTCA maintains market access into the U.K. that is amongst the best it has ever granted to a trading partner.

Continued balanced approach to investment protection: The CUKTCA provides important investor protections, while preserving the Government of Canada’s right to regulate in the public interest.

Continued access to U.K. government procurement market: Under the CUKTCA, Canadian suppliers will have guaranteed access to the U.K. government’s procurement market which is estimated to be worth approximately CAD$118 billion.

Continued high standards: The CUKTCA upholds and replicates CETA’s high standard provisions on labour, environment and dispute settlement.

Commitment to subsequent negotiations: Canada and the U.K. have agreed to enter into subsequent negotiations within a year of the CUKTCA’s entry into force, with the goal of reaching a new bilateral FTA within three years that can best reflect their bilateral relationship and interests at the time

Replication exercise and short form treaty

Supplementary messages

Background

When the Canada-U.K. Trade dialogue began, the U.K. was still a member state of the EU. This means that it was constrained in terms of what could be discussed regarding the Canada-U.K. trade relationship post-Brexit as the U.K. did not have the jurisdiction to negotiate FTAs. It was agreed with the EU that the U.K. was only able to agree to replications of existing EU FTAs. A Short Form Treaty was seen as a way to emphasize that the Canada-U.K. TCA is a replication exercise, as it incorporates CETA by reference and lists the elements that needed to be changed for it to work in a bilateral context in the treaty and its Annex.

While stakeholders are increasingly familiar with the CETA and its provisions, officials will need to ensure that important divergences between the CETA and the TCA are communicated to interested parties. In subsequent negotiations, a new, original long form treaty text that is more user-friendly should be developed between the parties.

Goods market access (supply managed goods)

Supplementary messages

Update

While the Canada-United Kingdom (U.K.) Trade Continuity Agreement (TCA) provides no new access for dairy, poultry and egg products, a side letter to the TCA provides some continuity of access to the U.K. under Canada’s “EU reserve” of the WTO cheese TRQ on a time-limited basis (until the end of 2023).

Supporting facts and figures

Background

Under the CETA between Canada and the European Union (EU), Canada provided the EU with two permanent bilateral TRQs for cheese: 16,000 tonnes for cheese of all types and 1,700 tonnes for industrial cheese. As of January 1, 2021, the U.K. will no longer have access to these TRQs as the U.K. will no longer be a party to CETA.

Under the World Trade Organization (WTO), Canada’s cheese TRQ of 20,412 tonnes is divided in two reserves: 14,272 tonnes (70%) for products originating from the EU, and 6,140 tonnes (30%) for products originating from other countries (i.e. non-EU). As a result of Brexit, under normal circumstances, the U.K. would move from Canada’s “EU” reserve to Canada’s “non-EU” reserve for WTO cheese on January 1, 2021.

Under a side letter to the TCA, Canada has agreed to allow the U.K. to continue to be eligible under the EU reserve of the WTO cheese TRQ for no more than three years (until no later than December 31, 2023). This outcome keeps the U.K. in the larger of the two reserves in the short-term and provides continuity for Canadian EU reserve

TRQ holders to continue importing cheese from the U.K.. The total amount of market access Canada provides for cheese remains unchanged.

No new market access was granted for dairy, poultry and egg products. As was provided under CETA, the agreement eliminates over-access tariffs for milk protein substances and within-access tariffs for all dairy, poultry and egg products. As a result, tariff treatment for the U.K. remains unchanged from the CETA.

Goods market access (agriculture outcomes)

Supplementary messages

Update

The TCA tariff rate quota (TRQ) volumes that apply to Canadian exporters of certain agricultural and fish and seafood goods are the result of a negotiated outcome that reflects bilateral trade. Implicated stakeholders were consulted during the negotiations and the resulting TRQ volumes represent commercially meaningful preferential access to the U.K. market.

Supporting facts and figures

Background

Under both the CETA and the TCA, eight Canadian products are subject to volume- limited tariff-rate quotas (TRQs). Of those, three TRQs are transitional and will be duty-free, quota free by January 1, 2022 – processed shrimp, frozen cod, low and

medium quality wheat. The other five TRQs are permanent– sweetcorn, bison, fresh/chilled beef and veal, frozen beef and veal, and pork.

A complete summary of TCA TRQ volumes is included in the annex attached.

Under CETA, beef, pork and wheat TRQs are administered under a licencing system that the U.K. was unable to replicate in the TCA. Instead, beef, pork and wheat TRQs will be administered on a first-come, first-served basis under the TCA. This outcome provides streamlined access to the U.K. market that reduces red-tape and paperwork. The TCA allows for an optional return to a licensing system if both parties agree.

Annex: Goods Market Access (Agriculture Outcomes)

Tariff-Rate Quotas (TRQs)

Below is a high-level summary of the TCA TRQ outcomes for Canadian exports. Like CETA, these outcomes will be codified in Annex 2A of Chapter 2 – National Treatment and Market Access for Goods.

Transitional Tariff-Rate Quotas (TRQs)

All products subject to transitional TRQs under the TCA (as well as CETA) will become duty- free, quota free as of January 1, 2024.

ProductAnnual duty-free volume
Processed Shrimp12,443 metric tonnes
Frozen cod791 metric tonnes
Low and medium quality wheat51,600 metric tonnes

Permanent Tariff-Rate Quotas (TRQs)

ProductAnnual duty-free volume 2021Annual duty-free volume 2022 and thereafter
Sweetcorn3,380 metric tonnes4,056 metric tonnes
Bison232 metric tonnes232 metric tonnes
Fresh/Chilled Beef and Veal2,311 metric tonnes2,708 metric tonnes
Frozen/Other Beef and Veal968 metric tonnes1,161 metric tonnes
Pork4,838 metric tonnes5,805 metric tonnes

Canada maintains duty-free access for high-quality beef under the WTO Hilton beef quota. The volume of that quota will be reflected in the U.K.’s WTO schedule of commitments, which remains under negotiation at the WTO.

Goods market access (tariff outcomes)

Supplementary messages

Update

The TCA replicates CETA tariff outcomes for both exports to the U.K. and imports from the U.K. without exception. This comprehensive outcome will benefit Canadian exporters across all sectors - agriculture, fish and seafood, industrial – that would otherwise face U.K. most-favoured nation (MFN) tariffs once the Brexit transition period ends on December 31, 2020. The U.K. refers to its MFN tariffs as the U.K. Global Tariff (U.K.GT).

Supporting facts and figures

Background

Under both the CETA and the TCA, eight Canadian products are subject to volume- limited tariff-rate quotas (TRQs). Of those, three TRQs are transitional and will be duty-free, quota free by January 1, 2022 – processed shrimp, frozen cod, low and medium quality wheat. The other five TRQs are permanent– sweetcorn, bison, fresh/chilled beef and veal, frozen beef and veal, and pork.

Additional information on products subject to TRQs is included under the Goods Market Access (Agriculture) brief.

Goods market access (rules of origin and origin procedures)

Rules of origin:

Origin procedures: 

Supplementary messages

Rules of origin:

Origin procedures:

Supporting facts and figures

Background

Rules of origin:

The TCA provides for accumulation with the EU, which means that EU materials will count toward the originating status of goods produced in Canada or the U.K., for purposes of determining if those goods qualify as originating under the TCA. This was a key U.K. negotiating objective.

The CETA origin quotas for textiles, apparel and some agricultural and seafood products have been replicated. However, for passenger cars and certain agricultural and seafood products, the volumes have been reduced. The revised TCA volumes are in most cases significantly greater than recent exports of these goods to the U.K. and as such will meet the needs of Canadian producers.

The ability to accumulate EU materials and the origin quotas are set to expire in 3 years. The objective is to negotiate a new Canada-U.K. agreement during this period.

Origin procedures:

Similar to the origin procedures provided for in the CETA, the TCA origin procedures establish common approaches for importers, exporters, and customs authorities with regard to areas such as certification of origin, record keeping, and origin verification. Accordingly, the chapter clarifies the processes necessary for importers and exporters to take full advantage of the Agreement, while at the same time providing customs authorities with an applicable methodology to ensure that only qualifying goods enjoy the benefits of the Agreement.

Sanitary and Phytosanitary Measures (SPS) & Technical Barriers to Trade (TBT)

Supplementary messages

Supporting facts and figures SPS

TBT

Parallel letters

Services

Cross-Border Trade in Services

Mutual recognition of professional qualifications, domestic regulations, telecommunications and electronic commerce

Temporary entry

Financial services

International maritime transport services

Supplementary messages

Financial services - supplementary messages

Supporting facts and figures

Background

The TCA reproduces the CETA outcome, with only technical modifications necessary in the CBTS Chapter to adjust the commitments to a Canada-U.K. context. As such, the TCA will continue to provide market access assurances across a wide range of sectors, matching the commitments made by the U.K. in the CETA.

For Canada, the TCA maintains important benefits of the CETA to guarantee access to Canadian services providers such as in the area of professional services, research and development and other business services. The TCA will continue to provide Canadian service suppliers with market access into the U.K. that is comparable with the best access that it has granted a free trade agreement partner. This means that Canadian suppliers in most service sectors are now on an equal footing with domestic service providers in the U.K., and receive better treatment than most of their non-U.K. competitors.

The TCA uses a negative list approach for the scheduling of non-conforming measures, meaning that all services sectors are covered unless explicitly listed as otherwise. As in all of its free trade agreements, Canada has excluded from coverage certain types of services because they are fundamental to our social fabric. Among the key services excluded are health care, public education and other social services

In addition to the CBTS chapter, the TCA reproduces the CETA framework to facilitate the negotiation of future Mutual Recognition Agreements (MRA) for professional qualifications, as well as replicating the CETA Domestic Regulation chapter. Both chapters complements the CBTS chapter in providing more predictable access to services providers.

The TCA MRA chapter maintains the framework, created in CETA, by which Canadian and

U.K. professionals may arrive at an MRA under the TCA agreement. Although this framework is maintained, it has less utility in a Canada-U.K. context. The MRA Chapter in CETA was created to address the unique challenges associated with negotiating an MRA with a bloc of nations like the EU and would likely not be needed in a Canada-U.K. context where professional bodies can directly engage with each other.

The TCA Domestic Regulation chapter replicates the same CETA chapter, which is aimed at facilitating the licensing and qualifications requirements and procedures for all sectors of the economy. This chapter benefits services providers that are seeking an authorization for companies and individuals to practice into respective territories.

The TCA Telecommunications chapter replicates the CETA outcome. The Chapter enhances regulatory certainty for telecommunications service suppliers by including disciplines to ensure that telecommunications regulators act impartially, objectively and in a transparent fashion. In this way, the Chapter supports Canadian telecommunications service suppliers and investors by making the regulatory environment for telecommunications services more predictable and competitive.

The TCA Electronic Commerce chapter replicates the CETA outcome, which addresses impediments faced by businesses and consumers that trade in the electronic environment. The chapter supports Canadian business and consumers engaged in electronic commerce through commitments that prohibit applying customs duties on digital products transmitted electronically, as well as consumer protection measures applicable to the protection of personal information.

Maritime services background

For the U.K., TCA benefits relate to continued targeted access to Canada’s domestic marine Cabotage market for feeder services between the ports of Halifax and Montreal, and eased restrictions on federally procured dredging. For Canada, the TCA maintains important benefits of the CETA for the transportation services sector, including Canadian users of transportation services, as well as enhances the attractiveness of Canadian ports as gateways to the North American market.

Financial services background

Canada and the U.K. have mature, well-developed financial sectors that are open to foreign entry. London is one of the world’s major financial centres, and all major Canadian financial institutions have established operations in the city. A number of U.K. financial institutions are active in Canada as well, with HSBC Canada being Canada’s seventh largest bank.

Dispute settlement mechanisms

Supplementary messages

Background

In the spirit of the Canada-U.K. Trade Continuity Agreement (TCA), the investment dispute resolution provisions were replicated from CETA, with only technical changes required to reflect the replacement of 28 EU Member States by the U.K. However, these provisions will be temporarily suspended upon entry into force of the TCA, pending a review by the Parties. The purpose of the review will be to consider the approach to investment dispute resolution that best reflects the bilateral relationship between Canada and the U.K. The review is set to commence within three months of entry into force of the TCA, and should be completed within three years (unless extended by agreement of the Parties). The review clause provides that the CETA-like investment dispute resolution provisions will automatically apply should the Parties fail to reach agreement within three years, provided that the equivalent CETA provisions have also entered into force.

The general Dispute Settlement chapter in the Canada-U.K. TCA was replicated from the CETA with a few technical changes. The dispute settlement mechanism in the CETA has a broad scope, applying to any disagreement pertaining to the interpretation or application of the agreement. It is flexible in that it contains provisions for consultation and mediation before moving to a formal dispute settlement process. It also works in conjunction with multilateral dispute settlement processes so that the same dispute cannot be heard simultaneously under both WTO and CETA dispute settlement processes.

[REDACTED]

Annex A: Investor-State Dispute Resolution (ISDS)

Generic Q&A and responsives

Context

In recent weeks, during CIIT meetings Mr. Blaikie and Mr. Savard-Tremblay have posed a number of questions on Investor-State dispute settlement (ISDS), including on the Canada- U.K.TCA. For example, when Minister Ng appeared before the CIIT on November 3, Mr. Savard-Tremblay asked about ISDS risks in relation to COVID-19 measures. The talking points below address such potential questions.

It should also be noted that the CIIT is expected to soon study the ISDS mechanism in Canadian trade and investment agreements.

1. Do the investment dispute resolution provisions in CETA or the TCA prevent the Government from regulating in the public interest?
2. Will the U.K. still benefit from the Investment Canada Act (ICA) changes under CETA?
3. RESPONSIVE - In light of CUSMA’s removal of ISDS, did Canada similarly remove ISDS in the TCA?
4. RESPONSIVE - Will inclusion of investment dispute resolution provisions in the TCA lead to COVID-19 related disputes against Canada?
5. RESPONSIVE - Is Canada considering suspending all ISDS provisions with its trading partners with respect to COVID-19 related measures?
6. RESPONSIVE –Norton Rose Fullbright article - Investor-state claims in the era of the COVID-19 pandemic, June 2020.
7. RESPONSIVE - Why does Canada continue to support ISDS in FTAs and FIPAs?

Wines and spirits

Supplementary messages

Supporting facts and figures

Background

Canada and the U.K. concluded negotiations of the Wines and Spirits (alcoholic beverages) provisions of the Canada-U.K. Trade Continuity Agreement (TCA) in early November 2020. The outcome replicates the CETA obligations for alcoholic beverages, including the provisions of the 1989 Agreement between Canada and the European Economic Community Concerning Trade and Commerce in Alcoholic Beverages and the 2003 Agreement Between Canada and the European Community on Trade in Wines and Spirit Drinks that where incorporated by reference into the CETA.

Importantly for Canadian stakeholders, the agreement maintains the derogation to the National Treatment obligations for three measures maintained by the provinces of British Columbia, Ontario and Québec.

There are some small textual differences with the CETA, with the most important one being a change to the Cost of Services Differential (COSD) audit request. CETA provides that the EU can request an audit of the liquor boards’ COSD every four years. As an EU member state, the U.K. would have received a copy of the audit report.

While the TCA does not allow the U.K. to request that a new audit be undertaken, it will allow them to receive a copy of the most recent EU-requested audit.

Inclusive trade

Supplementary messages

Update

The negotiated outcome of the TCA labour, environment, and sustainable development chapters replicate the CETA chapters. Only technical changes have been made to the text of the respective CETA chapters to reflect that the agreement is between Canada and the U.K. (and not Canada and the European Union).

Background

When CETA was signed, Canada and the EU also signed the JII, committing to an early review of the Sustainable Development, Environment and Labour Chapters of CETA, with a view to enhance their effective enforceability.

The TCA’s Labour chapter contains comprehensive labour rights obligations and confirms the importance of effectively enforcing domestic labour legislation. The TCA’s labour commitments provide assurances that high standards of labour protection will be maintained as bilateral trade increases with the U.K.

The TCA’s Environment Chapter contains comprehensive provisions designed to ensure that any increased economic activity as a result of the FTA does not occur at the expense of high levels of environmental protection, and that domestic environmental laws are effectively enforced and not weakened in favour of attracting trade and investment.

The TCA’s Sustainable Development chapter recognizes the value of international cooperation to achieve the goal of sustainable development, and commits the Parties to dialogue and consult on trade-related sustainable development issues of shared interest. It also establishes commitments for the Parties to promote trade in a manner that contributes to the objectives of sustainable development and to review, monitor and assess the impact of the implementation of the TTA on sustainable development.

Subsequent negotiations clause

Supplementary messages

Background

Brexit posed a unique situation where the U.K. could no longer be party to an existing Canadian trade agreement, the CETA, once it left the European Union. However, while the U.K. remained an EU Member State, it did not have the ability (under the EU treaties) to enter into entirely new trade negotiations. As a compromise measure aimed at ensuring as much continuity as possible for Canadian stakeholders, Canada agreed to seek to replicate the CETA on a bilateral basis with the U.K. as an interim solution.

The CETA, however, is an agreement that was designed for the Canada-EU relationship and was negotiated starting in 2009 (pre-dating CPTPP and CUSMA negotiations).

Canada has a strong interest in the negotiation of a bilateral agreement that can best reflect the Canada-U.K. trade relationship and our trade policy interests going forward. The Subsequent Negotiations clause in the TCA helps ensure that Canada and the

U.K. will proceed from what was an interim measure to a more tailored agreement for the long-term. The TCA will remain in place until a subsequent trade agreement enters into force, thus avoiding disruptions for Canadian business.

United Kingdom FTA agenda

Supplementary messages

Update

In December 2020, the U.K. signed trade continuity agreements (replications of existing EU FTAs) with a number of partners, including Canada, Singapore, Vietnam and Mexico, as well as a temporary goods-only agreement with Turkey (which has a customs agreement with the EU).

Just a week ahead of the December 31, 2020 deadline for the U.K. to complete its departure from the EU single market, the U.K. also concluded a Trade and Cooperation Agreement with the EU. The EU-U.K. Trade and Cooperation Agreement is mostly focused on tariff-free/quota-free trade in goods and provides little coverage for services trade, temporary entry of businesspersons, and the recognition of professional credentials. As such, it is a significant departure from the integrated, single-market conditions under which the U.K. and EU partners have traded with each other over decades. The EU-U.K. agreement has been provisionally applied since January 1, 2021, while approval is pending in the European Parliament. New frictions, barriers, and shortages of relevant experts (customs officials, veterinarians) are already causing disruptions to EU-U.K. supply chains, with the fishing sector and fresh seafood being particularly affected.

The U.K. has indicated to Canada and other CPTPP members that it intends to submit a formal accession application before the end of January.

Background

The EU negotiates international trade agreements on behalf of its Member States. As a result of Brexit, the U.K. is pursuing an ambitious and newly independent trade policy agenda. Prior to January 1, U.K. efforts fell into two categories: the ‘continuity’ program wherein the U.K. sought to replicate existing EU FTAs, like CETA, on a bilateral basis, and a program of FTA negotiations with new partners (the U.S., Japan, Australia, New Zealand) as well as possible accession to the CPTPP. Outside of the EU, the U.K. also needed to negotiate new terms of market access to the bloc, which took the form of an FTA rather than single market membership (the Norway model) or a customs agreement (the Turkey model). The EU accounts for 48% of U.K. global trade, whereas the EU FTAs in the continuity program account for 13.5%, with Canada representing 1.7% of U.K. global trade.

On the continuity agreements, the U.K. was seeking to reproduce the effects of existing EU agreements for when they no longer apply to the U.K. to ensure continuity of trading

arrangements for U.K. businesses. The U.K. has reached continuity agreements with 33 countries and trading blocs notably including Canada, Norway, South Korea, Switzerland, and U.K.raine. The U.K. has also signed some sectoral Mutual Recognition Agreements (MRA) with Australia, New Zealand and the United States.

In addition to the replication effort, the U.K. had made negotiating an FTA with the United States a top priority and had engaged in 5 rounds of negotiations ahead of the November 2020 American elections. It is unclear how quickly these talks might continue to advance under the new Biden administration, which has declared that its priority is managing the COVID-19 pandemic and domestic economic recovery. While a U.K.- U.S. FTA would have symbolic political importance to the U.K., its own government analysis predicts a modest 0.16% boost to GDP resulting from such a deal.

On October 23, 2020, the U.K.-Japan Comprehensive Economic Partnership

Agreement was鈥痵igned, and the Agreement was subsequently ratified in December 2020. Although it has been touted as the U.K.’s first independent trade deal, the Japan-

U.K. CEPA largely replicates the EU-Japan Economic Partnership Agreement apart from a few new areas (digital trade, for example). In addition to concluding their bilateral FTA, Japan has publicly supported the U.K. seeking to accede to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The U.K. sees its bilateral initiatives with CPTPP members, including Canada, as stepping stones to possible accession to that agreement.

Canada-United Kingdom Trade Dialogue Stakeholder Engagement

Pursuant to a statement by the Prime Minister and his U.K. counterpart in fall 2017, and again in 2018, of Canada’s participation in a Trade Dialogue with the U.K. to replicate Canada-European Union (EU) Comprehensive Economic and Trade Agreement (CETA) provisions on a bilateral basis, a Canada Gazette Notice was published in July 2018 to inform Canadians of proposed transitional trade agreement negotiations and the Government’s efforts to mitigate disruption for business due to the U.K. leaving the EU, and thereby CETA coverage.

As Trade Dialogue discussions were focused on replicating CETA provisions on a bilateral basis with the U.K. (where the U.K. has been party to the agreement since its provisional application in 2017 to present), broad public consultations were not undertaken. However, in areas where the replication exercise would necessarily diverge from CETA, implicated stakeholders were consulted on possible outcomes in a transitional trade agreement.

Officials organized targeted public consultations with affected stakeholders, as well as with Provinces and Territories, and invited representatives from agriculture and agri- food, fish and seafood, autos, pharmaceutical and consumer products sectors. These sessions were conducted via one-on-one meetings and round table discussions between July 2018 and November 2018. The purpose of the targeted public consultations was to discuss the CETA replication exercise and communicate Canada’s intention to have it lead to a future new bilateral FTA negotiation with the U.K. The consultation exercise also aimed to identify and confirm offensive and defensive interests of sector-specific Canadian stakeholders, as well as demonstrate the Government’s commitment to transparency, inclusiveness and openness in conducting the Trade Dialogue. In addition to these targeted consultations, officials have provided regular updates to Provinces and Territories through the Committee on Trade mechanism (C-Trade).

More recently, following the publication of the U.K. Global Tariff on May 19, 2020, the U.K.’s MFN applied tariff schedule to take effect January 1, 2021, and the U.K. government’s confirmation on June 12, 2020 that it would not request an extension to the Brexit transition period, interest in concluding a transitional trade agreement has been expressed by affected stakeholders and Provinces and Territories. Since May 2020, there have been regular planned meetings between the transitional trade agreement negotiating team and provincial and territorial C-Trade representatives, all virtual due to the COVID-19 crisis, as well as frequent email communication in a continued effort to share updates and hear their concerns and views. In addition, the transitional trade agreement negotiating team has been in frequent contact with stakeholders directly implicated by ongoing discussions, including in the agriculture sector.

Canada-United Kingdom commercial relations

Background

Canada and the United Kingdom (U.K.) have historically enjoyed mutually advantageous commercial relations.

Canada and the U.K. continue to work together to maintain our strong and important trading relationship post-Brexit. The U.K. will remain a significant market for Canadian companies post-Brexit, with the U.K. being the destination for 23.1 per cent (2019) of our merchandise trade with the EU. Canada-U.K. merchandise trade has averaged $27.4 billion annually since the Canada-European Economic and Trade Agreement (CETA) came into effect, up nearly 8.2% compared to pre-CETA (2016). On November 21st, 2020, the successful conclusion of talks for the Canada-U.K. Trade Continuity Agreement – an interim deal that will be in place as Canada and the U.K. work towards negotiating a comprehensive free trade agreement – was announced and its domestic approval in Canada and the U.K. continues.

The U.K. is a large, diverse and sophisticated economy, home to many important global firms, including the headquarters of 24 Fortune 2017 Global 500 companies. Canadian companies are generally well-received in the U.K., as Canada is seen as a safe investment destination. The U.S. is one of our major competitors in attracting U.K. Foreign Direct Investment (FDI). Canada is not, however, always top-of-mind for investors, who may seek higher rates of return in alternative markets. Canada’s challenges in this regard include persuading investors of Canada’s competitive advantage, despite the relatively small size of the market, e.g., Canada as gateway to the U.S. market, and the changing perception of prohibitively high corporate tax rates.

The COVID-19 pandemic has hit the U.K. economy particularly hard, with GDP 8% lower in October 2020 than before the pandemic, and expected to fall further during the difficult winter months. In addition to the economic impact COVID-19 will have on U.K. businesses and individuals, the potential economic impact of Brexit may further hamper the ability of the British economy to bounce back quickly. However, the U.K. remains a global hub for firms across a range of sectors. There is high demand for products and services that lower costs and improve efficiencies, and with ambitious low-carbon targets, there is demand for renewable energies. The U.K. Industrial Strategy released in November 2017 focuses on strengthening the

U.K. supply base, which aligns well with Canadian capabilities and priorities in a number of areas. These include an increase in the National Productivity Investment Fund to £31B (CAD $53.6B) supporting investments in transport, housing and digital infrastructure, and new government-industry partnerships in life sciences, construction, artificial intelligence (AI) and the automotive sectors.

Trade

The U.K. was Canada’s third largest destination for merchandise exports worldwide in 2019, and a key source of FDI and Science & Technology partnerships. Two-way merchandise trade with the U.K. amounted to $29 billion in 2019, making it Canada’s fifth largest trading partner after the U.S., China, Mexico and Japan. Canada continues to maintain a merchandise trade surplus for the last 10 years (exports of $20.5 billion versus imports of $8.4 billion in 2019); exports remain focused on natural resources rather than value- added products. 70% of Canada’s exports to the U.K. is non-monetary gold, followed by mineral fuels and oils (crude oil), machinery, wood (wood pellets), aircraft and spacecraft. Canada imports machinery, vehicles (passenger vehicles), mineral fuels and oils, aircraft and spacecraft, and pharmaceutical products from the U.K. There is room for diversification and increase of our exports to the U.K.

With the U.K. National Infrastructure Plan (NIP) calling for 564 projects valued at over $850 billion over the next 20 years, particularly in energy, transportation and utilities, tangible opportunities for Canadian companies as investors, services or goods providers continue in these sectors. Additionally, as the U.K. attempts to drive costs down in the nationalized health care system (National Health Services NHS), sales of innovative technologies and medical devices are other areas of opportunity.

London remains one of the world’s most important financial centres, hence the current opportunities in financial services and related technologies. With the rising costs of education, greater recognition of the benefits of international experience and more demanding immigration rules in the U.K., the attractiveness of Canadian educational services is on the rise. There are opportunities in the U.K.’s green building market due to a stronger focus on higher energy efficiency standards. The U.K. is Canada’s second largest services trading partner in the world, after the U.S. Bilateral trade in services between Canada and the U.K. in 2019 amounted to over $14.5 billion, with Canadian exports accounting for almost $7.1 billion.

Investment

The U.K. is Canada’s fourth most important source of FDI after the U.S., the Netherlands, and Luxembourg. In 2019, FDI stock from the U.K. was valued at $62.3 billion. This being said, Canada has invested more in the U.K. than the reverse. Canada stock of FDI in the U.K. was valued at $107.0 billion in 2019, making the U.K. Canada’s second largest destination for Canadian direct investment abroad. Approximately 600 Canadian companies own over 1100 subsidiaries in the U.K.

Similar to our trade relationship, much of the FDI between the U.K. and Canada is in the resource and professional services areas, but there are major investments in digital media and advanced manufacturing. CETA will provide Canadian and EU investors with greater predictability, transparency, and protection for their investments in each other’s markets, as well as greater labour mobility provisions to move talent between Canada and the EU.

The Canadian public sector pension funds have over $52 billion invested in U.K. infrastructure and real estate.

Science, Technology, and Innovation

The U.K. is Canada’s most important science, technology and innovation (STI) partner in Europe and our second most important STI partner in the world, after the U.S. This importance is underscored in the comprehensive Canada-U.K. Memorandum of Understanding (MoU) to facilitate further bilateral STI cooperation. The MoU fosters collaboration amongst government bodies, knowledge-based institutions and businesses in the fields of science, technology, innovation and entrepreneurship, with a view to accelerate the commercialization of emerging technologies and the growth of domestic firms. Priority areas of focus include clean technologies, advanced manufacturing, agri-tech, and quantum technology.

Canada and the U.K. have identified clean technologies as a priority sector for collaboration under the MoU. Since the MoU was signed in September 2017, there has been significant activity between Canada and the

U.K. on clean technology. One major outcome is the launch of the Canada-U.K. Smart Grid Challenge called Power Forward in October 2018, targeting the development of innovative solution by industrial consortiums from the two countries.

Energy

Canada and the U.K. share common interests in promoting energy security. Canadian expertise and technologies could help the U.K. in areas such as unconventional energy extraction, and carbon capture and storage (CSS), and wave and tidal energy.

As of January 1st, 2020, the new bilateral Canada - U.K. Nuclear Cooperation Agreement came into force, replacing the Canada-Euratom treaty that previously applied to the U.K.

Canada–United Kingdom bilateral relations

Background

Canada and the U.K. enjoy a mutually beneficial bilateral relationship founded on deep historical links, strong people-to-people ties (including extensive academic, scientific and cultural cooperation), common values, and vibrant economic relations. The relationship is bolstered by collaboration on key global issues, including at multilateral forums such as the UN, G7, G20, OSCE, NATO, WTO, OECD and the Commonwealth.

People-to-people ties

People-to-people ties are extensive. Over 10 million Canadians claim some form of British ancestry. Some 560,000 Canadians were born in the U.K. and the U.K. is the second-largest source of visitors to Canada (922,189 in 2019) after the U.S.

General relations

The governments of Canada and the U.K. have strong relationships across a wide range of issues, involving numerous government departments on both sides, and among officials at all levels.

The Canada-U.K. bilateral partnership has been further reinforced through the signing of the Canada-U.K. Action Plan by the two Prime Ministers in September 2017. The Action Plan encompasses a wide range of issues where our two countries cooperate. They include innovation and technology, climate change, development, gender equality and defence and security, among others. Canada and the U.K. are working together to renew the Canada-U.K. Action Plan.

Diplomatic and consular cooperation is extensive. Canadian and British diplomats share facilities in several countries and the back cover of every Canadian passport directs its bearer to seek out a British mission in the event that a Canadian office is unavailable. Canada depends heavily on British support in key countries and often seeks the support of the U.K. in consular cases.

COVID-19

The strength of relationship of the Canada/U.K. relationship has been made clear during the pandemic. There are ongoing discussions at all political levels (PM, foreign minister, development minister) and among government officials on addressing our common concerns. The U.K. participates in the Ministerial COVID-19 Coordination Group hosted by Canada’s Foreign Minister, and is co-chairing the Development Ministers’ Contact Group on COVID-19 with Canada.

We are very like-minded on the COVID-19 response, including support for the rules-based international order, maintaining open supply chains, supporting the development of a vaccine, and countering disinformation.

At the onset of the pandemic, Canada and the U.K. have supported each other’s repatriation efforts – allowing nationals on each other’s flights.

Security and defence relations

As key members of the Five Eyes Intelligence Community and NATO, Canada and the U.K. have a strong security and defense relationship which includes close military and law enforcement cooperation. Canada has long been a supporter of the Northern Ireland Peace Process. The U.K.’s permanent seat on the UN Security Council, and its extensive multilateral linkages, make it an invaluable partner for Canada in addressing key global security issues.

Development relations

Canada and the U.K. share a number of development priorities, including supporting the empowerment of women and girls, improving access to education and healthcare, addressing migration and food security challenges, tackling climate change, and continuing to work cooperatively in a number of developing country contexts. Development cooperation has increased following the commitments made by both Prime Ministers to reinforce our commitment to tackle global development challenges. A particularly strong area of collaboration is sexual and reproductive health and rights.

Bilateral agreements

Canada and the U.K. maintain a wide range of bilateral agreements covering youth mobility, sharing of diplomatic resources, consular assistance and defence cooperation. Since the Brexit referendum in 2016, the Governments of Canada and the U.K. have maintained their full commitment to ensure the smooth transition of our bilateral relationship post-Brexit. To achieve this, the Government of Canada has worked closely with the U.K. Government to identify which Canada-EU instruments needed to be transitioned into bilateral arrangements between Canada and the U.K. in order to maintain continuity and predictability for both countries. This includes in the areas of trade, nuclear cooperation, customs and transportation.

Recent high-level meetings

On November 21, 2020, PM Trudeau and PM Johnson, along with the trade ministers, announced the conclusion of talks on the Canada/U.K. Trade Continuity Agreement.

First Secretary of State and Secretary of State for Foreign, Commonwealth and Development Affairs, Dominic Raab, hosted then-Foreign Minister Champagne at Hampton Court Palace on August 28, 2020.

Secretary Raab visited Montreal in January 2020 for a bilateral meeting with then-Foreign Minister Champagne.

On January 16, 2020, International Coordination and Response Group for the victims of Flight PS752, comprised of Canada, Afghanistan, Sweden, U.K.raine and the U.K., met at Canada House in London and agreed on a framework for cooperation with Iran in response to the downing of flight PS752.

PM Trudeau attended the NATO Leaders’ Meeting in London in December 2019.

In June 2019, PM Trudeau visited Portsmouth, the U.K., to participate in the 75th anniversary of D-Day and the Battle of Normandy.

PM Trudeau visited London in April 2018 to attend the Commonwealth Heads of Government Meeting.

Then-PM Theresa May visited Ottawa in September 2017 for a series of bilateral and business meetings. The two Prime Ministers agreed to a number of initiatives to enhance the bilateral relationship in the form of the Canada-U.K. Action Plan.

PM Trudeau visited Scotland in July 2017, where he met with Her Majesty the Queen and received an honorary degree from the University of Edinburgh. PM Trudeau visited London shortly after taking office in November 2015, where he had meetings with then-PM Cameron and Her Majesty the Queen.

Since the creation of the Canada-U.K. Parliamentary Association in 1997, a delegation of Canadian parliamentarians visit the U.K. regularly to meet with counterparts and other political and government representatives to exchange information on issues of common interest.

Diplomatic representation

Canada is represented in the U.K. by the High Commission in London. Its work includes political affairs (both bilateral and multilateral), commercial relations, science and technology, public affairs, defense, policing and immigration. Employees are drawn from GAC, IRCC, DND, the RCMP and CBSA, among others. Canada has honorary consuls in Edinburgh, Cardiff, and Belfast. In addition, Ontario, Quebec, British Columbia and Alberta are represented through offices in London. Due to the high number of Canadians who visit the U.K. each year and the number of Canadian residents in the U.K., there is a significant consular caseload.

The U.K. is represented in Canada by the British High Commission in Ottawa. The U.K. maintains trade and consular offices in Toronto, Montreal, Vancouver, and Calgary, and has honorary consuls in Quebec City, Winnipeg, Dartmouth, and St. John's.

United Kingdom: political and economic overview

Background

The United Kingdom of Great Britain and Northern Ireland is a major global power, with significant economic, cultural, military, scientific and political influence. With approximately 67 million people (2019), it has one of the world's largest economies and defence budgets, and is a recognized nuclear weapons state. It is a permanent member of the UN Security Council, and a member of NATO, the OSCE, Commonwealth, G7, and the G20.

The U.K. population is diverse, partly as the legacy of a former empire but also because of relatively open immigration policies. Like many countries, the U.K. is grappling with multiculturalism, immigration and national identity. Uncertainty caused by Brexit has had an impact on migration from EU countries, and has influenced the decision of many EU citizens to leave the U.K. Net migration from the EU to the U.K. is at a six-year low, while non-EU migration is the highest in more than a decade, substantially surpassing migration from EU countries, and mainly attributable to newcomers from India and China.

Political

The U.K.’s most recent general election was on December 12, 2019, and resulted in PM Boris Johnson and his Conservatives winning a majority, becoming the largest Conservative majority since Margret Thatcher in 1987. The Labour Party suffered its worst defeat since 1935, and Jeremy Corbyn stepped down as leader and has been replaced by Keir Starmer. The result has increased tension on the Union as nationalists achieved strong wins in Scotland and Northern Ireland. The pro-independence Scottish National Party (SNP) won 48 out of 59 seats in Scotland and, for the first time, the nationalists in Northern Ireland hold more seats than unionist parties.

COVID-19

The U.K. now regularly records well over 50,000 daily cases. The U.K. Government and Devolved Administrations in the U.K. have all implemented enhanced restrictions. In England. PM Johnson announced a new national lockdown starting on January 6 that will last for at least seven weeks.

On January 11, the U.K. Government published its COVID-19 Vaccines Delivery Plan for England. The U.K. Government’s plan focuses on four key areas: ensuring supply of vaccine; prioritizing the most at risk groups; the places where people will receive the vaccine; and the people who will deliver the vaccine. The plan also reiterates the U.K. Government’s commitment to offer the first vaccine dose to all those in the top four priority groups by February 15. These four priority groups include: residents in care homes for older adults and their carers; 80-year-olds and over and frontline health and social care workers; 75-year-olds and over; and 70-year-olds and over and clinically extremely vulnerable individuals. The U.K. has approved the Pfizer/BioNTech, Moderna, and Oxford/AZ vaccines. The U.K. Government has started to publish daily the statistics on the number of people who have been vaccinated.

Brexit

In a June 2016 referendum, the U.K. voted to leave the EU (“Brexit”) by a margin of 52% to 48%. The result was uneven across the different parts of the U.K.; England and Wales voted to leave the EU, while Scotland and Northern Ireland voted to remain. 1317 days following the U.K.’s Brexit referendum, the U.K. officially left the EU on January 31, 2020.

Between February 1 and December 31, 2020, there was a transition period whereby the U.K. remained bound by EU law, and during which the U.K. and the EU negotiated their future relationship. Following months of intense negotiations, the U.K./EU Trade and Cooperation Agreement (U.K./EU TCA) was reached on December 24, 2020.

The U.K./EU TCA is narrow in scope, placing a priority on the terms of trade for goods. Significant aspects of the deal are open-ended or subject to periodic review, based on how domestic policies evolve on both sides of the Channel. Much also remains to be discussed with regards to the broader U.K.-EU relationship, including on important issues such as foreign policy and security cooperation. The U.K./EU TCA consists of 4 pillars: 1) trade and economic partnership (FTA); 2) sectoral partnerships (e.g. energy, climate, transport, fisheries, social security, research, Horizon Europe etc.); 3) citizen’s security (new framework for law enforcement and judicial cooperation in criminal and civil law matters); and, 4) governance and dispute settlement mechanisms. The two sides agreed to create a free trade area with no tariffs or quotas on products, regulatory and customs cooperation mechanisms, as well as provisions ensuring a level playing field for open and fair competition, as part of a larger economic partnership. Despite these features, the economic relationship between the U.K. and EU will no longer be as free as it has been for much of the past 30 years, particularly with regards to the movement of goods, services, capital and people.

On December 30, 2020, European Council President Charles Michel and European Commission President Ursula von der Leyen both signed the U.K./EU TCA, with ratification to follow. In the U.K., the EU (Future Relationship) Bill received Royal Assent on December 31, 2020. The Withdrawal Agreement’s transition period formally ended on January 1, 2021, and with the U.K. and E.U Council’s approval, the U.K./EU TCA is officially applied provisionally.

Northern Ireland

A key concern regarding the U.K.’s departure from the EU is Northern Ireland, and the impact any form of border checks would have on the Good Friday Agreement, which ended sectarian violence in the 1990s.

The EU-U.K. Brexit Agreement (Withdrawal Agreement) of October 2019 includes a Northern Ireland Protocol. This is designed to prevent any hardening of the border on the island of Ireland between Northern Ireland and the Republic, in recognition of the intertwined nature of the societies on both sides, and of the contribution that seamless movement of goods, services and people across that border has made to the peace process as agreed in the Good Friday Agreement. The Protocol avoids a North-South border on the island of Ireland by introducing new checks between Northern Ireland and the rest of the U.K.

The Northern Ireland Protocol entered into force on January 1, 2021. The new relationship between the U.K. and the EU entails important new regulatory and customs requirements that will be placed on goods moving between Great Britain to Northern Ireland, with particularly strict rules on food products entering Northern Ireland. The implementation of these new requirements will be particularly sensitive in relation to Northern Ireland given the fragile nature of the Northern Ireland peace process. The protection of the seamless North-South border at the expense of the East-West border is unpopular with Unionist communities who feel that the Protocol separates Northern Ireland in practical and conceptual terms from the rest of the U.K.

Northern Ireland was without a devolved government for three years after power-sharing between the Democratic Unionist Party (DUP) and Sinn Féin, as set out in the Good Friday Agreement that ended decades of sectarian violence, collapsed in January 2017. The impasse was mainly over pre-existing tensions over identity issues (Irish language), respect between parties and how to manage prosecutions over historical violence, but Brexit exacerbated the situation and eroded goodwill between parties.

Finally, in January 2020, the Assembly was restored with a deal entitled New Decade, New Approach.

Scottish Independence Movement

In the 2014 referendum on Scottish independence, 55% of Scots voted to remain in the U.K. Support for independence did not significantly decline after the referendum, remaining between 44% - 50% between 2014 and the present day. Support for the Scottish National Party and for Scottish independence have risen throughout the COVID-19 pandemic, as the Scottish Government has increased its visibility and credibility with a response that many Scots see as more effective than that of the U.K. Government.

The SNP, the governing party in Scotland since 2011, has tried to leverage the Brexit vote (in which 62% of Scots voted to Remain in the EU) to launch a second independence referendum.

In April 2019, Scotland’s nationalist First Minister Nicola Sturgeon announced that she wanted the referendum to take place before May 2021 (the date of the next Scottish Parliament elections). There is no guarantee that any referendum will take place, as Sturgeon confirmed that she will not proceed without U.K. Government consent, in order to put the result beyond doubt or challenge.

The SNP’s success in the December 2019 election will only further embolden the SNP to push for a referendum. In December 2019, First Minister Sturgeon sent a formal note to PM Johnson requesting the power to hold a legally-binding second independence referendum. PM Johnson denied the request in January 2020.

Foreign Policy

Following its exit from the EU, the U.K. is looking to assert its leadership on the international stage under its “Global Britain” agenda, notably through its G7 presidency and hosting of the United Nations Framework Convention on Climate Change, Conference of the Parties (CoP26), both in 2021. The U.K.’s international priorities will be outlined in an Integrated Review of Security, Defence, Development and Foreign Policy, set to be published in February 2021. We anticipate that the U.K. will advance priority issues such as the environment/climate change, public health and COVID, economic resilience, and a focus on advancing its relations in the Indo-Pacific region. The U.K. will also need to focus on restoring its relationship with the EU and individual EU Member States, following years of political tensions due to Brexit.

As a result of Brexit, the U.K. has also begun to pursue an ambitious independent trade agenda.

U.K. efforts fall into two categories: the ‘continuity’ program wherein the U.K. seeks to replicate existing EU Free Trade Agreements (FTAs), like the Canada-EU Comprehensive Economic and Trade Agreement (CETA), on a bilateral basis, and a program of FTA negotiations with new partners (the U.S., Japan, Australia, New Zealand), as well as possible accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Gender Equality

The U.K. ranked 21st out of 153 countries in the 2020 Global Gender Gap report from the World Economic Forum. In the European Institute for Gender Equality’s Index 2019, the U.K. was ranked 5th out the 28 EU Member States.

A record of 220 women were elected to parliament in the December 2019 election, out of 650 seats. This was a new high for the House of Commons. There are currently seven women Cabinet Ministers.

The U.K. is a leader on Women, Peace and Security issues and closely aligned with Canada. The

U.K. launched the Preventing Sexual Violence in Conflict Initiative in 2014, for which they will host an international conference in 2021.

Economic

The pandemic has hit the U.K. economy particularly hard, with GDP 8% lower in October than before the pandemic, and expected to fall further during the difficult winter months. Similar to the Canadian approach, the U.K. Government has established economic supports across multiple fronts.

In 2020, the U.K. Government spent £280 billion (approx. CAD $485M) on measures to fight COVID-19 and its impact on the economy. The central pillar of the U.K. approach is an 80 per cent wage subsidy for eligible furloughed employees and the self-employed. A variety of credit facilities are also available for firms of all sizes, primarily through government guaranteed loans distributed through private sector financial institutions. The Government is providing tax deferrals, grants and targeted support for specific sectors of the economy, such as fishing, travel and start- ups. The U.K. Government has also launched consultations in support of small businesses, with the aim of reducing the economic impact of the pandemic. Finally, the U.K. Government has implemented a temporary increase to Universal Credit (equivalent to employment insurance), providing low-income and unemployed individuals up to an additional £1,000 (approx. CAD $1,730) per year.

On January 5, 2021, the U.K. Government brought in additional economic support in response to the latest lockdown. Chancellor of the Exchequer Rishi Sunak announced a £4.6bn (approx. CAD $7.9B) financial support package that effectively bolsters existing cash grant programs to businesses that cannot operate due to health restrictions (primarily in the retail, leisure and hospitality sectors). The furlough scheme, which has been extended a number of times and was due to expire on March 31, 2021, has been extended until the end of April 2021. In line with established funding structures, the U.K. Government will also provide some limited additional funds to the Devolved Administrations.

However, business leaders have raised concerns that even this extra support would not be enough to save tens of thousands of companies from collapse. Concerns have also been raised about the looming expiry dates for key programs where usage rates remain high, such as the wage subsidy schemes and the Universal Credit top-up.

In addition to the economic impact COVID-19 will have on U.K. businesses and individuals, the potential economic impact of Brexit may further hamper the ability of the British economy to bounce back quickly.

Brexit

Latest developments

Current position

Background

In a June 2016 referendum, the U.K. voted to leave the EU (“Brexit”) by a margin of 52% to 48%. The result was uneven across the different parts of the U.K.; England and Wales voted to leave the EU, while Scotland and Northern Ireland voted to remain. 1317 days following the U.K.’s Brexit referendum, the U.K. officially left the EU on January 31, 2020.

The U.K./EU Trade and Cooperation Agreement

Between February 1 and December 31, 2020, there was a transition period whereby the U.K. remained bound by EU law, and during which the U.K. and the EU negotiated their future relationship. Following months of intense negotiations, the U.K./EU Trade and Cooperation Agreement (U.K./EU TCA) was reached on December 24, 2020.

The U.K./EU TCA is narrow in scope, placing a priority on the terms of trade for goods. Significant aspects of the deal are open-ended or subject to periodic review, based on how domestic policies evolve on both sides of the Channel. Much also remains to be discussed with regards to the broader U.K.-EU relationship, including on important issues such as foreign policy and security cooperation. The U.K./EU TCA consists of 4 pillars: 1) trade and economic partnership (FTA); 2) sectoral partnerships (e.g. energy, climate, transport, fisheries, social security, research, Horizon Europe etc.); 3) citizen’s security (new framework for law enforcement and judicial cooperation in criminal and civil law matters); and, 4) governance and dispute settlement mechanisms. The two sides agreed to create a free trade area with no tariffs or quotas on products, regulatory and customs cooperation mechanisms, as well as provisions ensuring a level playing field for open and fair competition, as part of a larger economic partnership. Despite these features, the economic relationship between the U.K. and EU will no longer be as free as it has been for much of the past 30 years, particularly with regards to the movement of goods, services, capital and people.

On December 30, 2020, European Council President Charles Michel and European Commission President Ursula von der Leyen both signed the U.K./EU TCA, with ratification to follow. In the U.K., the EU (Future Relationship) Bill received Royal Assent on December 31, 2020. The Withdrawal Agreement’s transition period formally ended on January 1, 2021, and with the U.K. and E.U Council’s approval, the U.K./EU TCA is officially applied provisionally.

Northern Ireland

A key concern regarding the U.K.’s departure from the EU is Northern Ireland, and the impact any form of border checks would have on the Good Friday Agreement, which ended sectarian violence in the 1990s.

The EU-U.K. Brexit Agreement (Withdrawal Agreement) of October 2019 includes a Northern Ireland Protocol. This is designed to prevent any hardening of the border on the island of Ireland between Northern Ireland and the Republic, in recognition of the intertwined nature of the societies on both sides, and of the contribution that seamless movement of goods, services and people across that border has made to the peace process as agreed in the Good Friday Agreement. The Protocol avoids a North-South border on the island of Ireland by introducing new checks between Northern Ireland and the rest of the U.K.

The Northern Ireland Protocol entered into force on January 1, 2021. The new relationship between the U.K. and the EU entails important new regulatory and customs requirements that will be placed on goods moving between Great Britain to Northern Ireland, with particularly strict rules on food products entering Northern Ireland. The implementation of these types of new requirements will be particularly sensitive in relation to Northern Ireland given the on-going fragility of the Northern Ireland peace process. The protection of the seamless North-South border at the expense of the East-West border is unpopular with Unionist communities who feel that the Protocol separates Northern Ireland in practical and conceptual terms from the rest of the U.K.

The U.K. post-Brexit

Following its exit from the EU, the U.K. is looking to assert its leadership on the international stage under its “Global Britain” agenda, notably through its G7 presidency and hosting of the United Nations Framework Convention on Climate Change, Conference of the Parties (CoP26), both in 2021. The U.K.`s international priorities will be outlined in an Integrated Review of Security, Defence, Development and Foreign Policy, set to be published in early February 2021. We anticipate that the U.K. will advance priority issues such as the environment/climate change, public health and COVID, economic resilience, and a focus on advancing its relations in the Indo-Pacific region. The U.K. will also need to focus on restoring its relationship with the EU and individual EU Member States, following years of political tensions due to Brexit.

As a result of Brexit, the U.K. has also begun to pursue an ambitious independent trade agenda. U.K. efforts fall into two categories: the ‘continuity’ program wherein the U.K. seeks to replicate existing EU Free Trade Agreements (FTAs), like the Canada-EU Comprehensive Economic and Trade Agreement (CETA), on a bilateral basis, and a program of FTA negotiations with new partners (the U.S., Japan, Australia, New Zealand), as well as possible accession to the Comprehensive and Progressive Agreement for Trans- Pacific Partnership (CPTPP).

Transition to Canada/U.K. Instruments Post-Brexit

Since the Brexit referendum in 2016, the Governments of Canada and the U.K. have maintained their full commitment to ensure the smooth transition of our bilateral relationship post-Brexit. To achieve this, the Government of Canada has worked closely with the U.K. Government to identify which Canada-EU instruments needed to be transitioned into bilateral arrangements between Canada and the U.K. in order to maintain continuity and predictability for both countries. This includes in the areas of trade, nuclear cooperation, customs and transportation.

Report on committee hearing

Name of committee: Standing Committee on International Trade (CIIT)
Report prepared by: Alan Wilde, Parliamentary Affairs, GAC
Date and time: November 16, 2020, 11:00AM-1:00PM
Location: Wellington Building, Room 410/Hybrid
Topic: Trade Between Canada and the United Kingdom: A Potential Transitional Trade Agreement

Members present:

LPC: Hon. Judy Sgro, Chandra Arya, SU.K.h Dhaliwal, Randeep Sarai, Rachel Bendayan (Parliamentary Secretary – Small Business, Export Promotion and International Trade)
CPC: Tracy Gray, Randy Hoback, Ben Lobb, Ziad Aboultaif
BQ: Simon-Pierre Savard-Tremblay
NDP: Daniel Blaikie

Witnesses:

Business Council of Canada

Canadian Chamber of Commerce

Canadian Labour Congress

Trade Justice Network

Overview of meeting:

The Conservative questions to the witnesses tried to paint the Government has having been slow to act in negotiating a transitional agreement with the U.K.. It has been two years since the U.K. voted for Brexit and now we are weeks away from Canadian exporters facing higher tariffs than some competitors that have already signed agreements. MR Kennedy and Mr. Agnew said that Canadian exporters face uncertainty as we move to the end of the year. Should they price their products anticipating tariffs will come into force on January 1st or should they anticipate a last minute deal? The Conservatives also questioned how implementing legislation could be passed by both Houses of Parliament at this late date, (although they also acknowledged the Government has options).

The majority of the Liberal questions were put to Mr. Yussuff and Mr. Brown regarding things they would like to see addressed in the new agreement; labour, climate, conflict resolution etc. Mr. Yussuff suggested that CUSMA should be the new standard for trade agreements.

NDP questions led to Mr. Yussuff and Mr. Brown talking about fair trade vs free trade. Mr. Brown said that Canada doesn’t have significantly more trade with countries it signs agreements vs countries it doesn’t have FTAs with. Mr. Yussuff called for the end of ISDS and during questions from the Bloc Member Mr. Brown said that the Canadian Law firm Norton Rose Fulbright was predicting international companies would use Canada’s domestic COVID-19 measures as an opportunity to launch investor state dispute actions.

Trevor Kennedy told the Committee that CETA has been important for members of the Business Council of Canada and much work remains to be done for SMEs to take advantage of the agreement. Canadians have momentum in the U.K. that must be maintained. While there was an initial assumption that most Canadian companies would leave the U.K. as Brexit approached, most have stayed. For some the U.K. is their only market in Europe. He said that the approach by Canadian negotiators was ‘wise’ but with many competitors negotiating with the U.K., Canada could potentially lose market share in the U.K. without a transitional deal.

Mark Agnew said that the U.K. is our third largest export market but this is still small over all behind our trade with the US, so there is a lot of room for growth. Without a transitional deal in place, Canadians would likely lose market share. If CETA matters, then it should be transitioned into a bilateral agreement. Canada should look improve the following in a new bilateral agreement; digital trade, regulatory co-operation, rare earth minerals, trade facilitation and labour mobility. He also cited a 2018 study by Dan Ciuriak on U.K. trade and at Mr. Blaikie’s request agreed to provide it to the committee.

Hassan Yussuff of the Canadian Labour Congress (CLC) represents millions of Canadian union members and has always advocated fair trade. It should improve wages and standard of living and not drive them down. Negotiations should be conducted in public and not behind closed doors. For far too long negotiations have been hidden from the public. CETA should not been the standard for a bilateral agreement with the U.K.. ISDS should be eliminated from future agreements because it allows private companies to curtail federal laws and is unacceptable. CETA labour agreements are not enforceable, whereas CUSMA has good labour protections. CUSMA also allows for rapid civic response. Canada’s spending on pharma drugs is higher than most OECD countries. CETA has positive commitments on Climate but they are not binding and there is concern ISDS could be used to avoid climate obligations.

Larry Brown of Trade Justice Network said we are facing two crises; COVID-19 and Climate Change and we should rethink trade agreements because of these. We have had to get our PPE from outside of Canada and Premier Doug Ford has said that we won’t let that happen again and must develop our own capacity. This may mean violating some of our existing trade deals and we must be prepared for that.

There are a lot of ISDS cases ready to go as countries close things down for COVID from things as simple as rent relief. There is an assumption that trade deals are good but they weaken democracy because they weaken government, increase income inequality, endanger public services, endanger the environment and kill jobs. Several studies have indicated that trade increases just as much with countries we don’t have trade deals with as with countries where we have trade deals. With NAFTA we had a lot of wage stagnation. Regulatory cooperation should not be based on the lowest common denominator.

At the conclusion of the testimony of the witnesses, the Chair explained the way forward for an interim report. There will be a meeting on Friday and two meetings next Monday will have 8 witnesses. This will allow the analysts to draft an interim report of 3-5 pages by the Christmas break. The analysts could then work over the holidays to add any possible developments and write the full report for review by the committee in late January. The Chair said they would then expect to study the WTO next after the U.K. is completed.

Q & A

Gray (CPC)

Arya (Lib)

Savard-Tremblay (Bloc)

Blaikie (NDP)

Aboultaif (CPC)

Sarai (Lib)

Lobb (CPC)

Bendayan (Lib)

Hoback (CPC)

Dahliwal (Lib)

Follow-up NIL

Next Meeting: TBD

DCL will circulate the “blues” (unofficial transcripts) when they become available. The edited, translated transcript will be available on the within the next two weeks.

The hearing was open to the public and can be listened to via (link embedded) at any time.

If you have any questions, please do not hesitate to contact me, and to loop in others as required

Regards,

Alan

Report on committee hearing

Name of committee: Standing Committee on International Trade (CIIT)
Report prepared by: Alan Wilde, Parliamentary Affairs, GAC
Date and time: November 20, 2020, 1:00PM-3:20PM
Location: Wellington Building, Room 420/Hybrid
Topic: Trade Between Canada and the United Kingdom: A Potential Transitional Trade Agreement

Members present:

LPC: Hon. Judy Sgro, Chandra Arya, SU.K.h Dhaliwal, Randeep Sarai, Rachel Bendayan (Parliamentary Secretary – Small Business, Export Promotion and International Trade)
CPC: Tracy Gray, Randy Hoback, Ben Lobb, Ziad Aboultaif
BQ: Simon-Pierre Savard-Tremblay
NDP: Daniel Blaikie

Witnesses:

High Commission of Canada to the United Kingdom

抖淫视频

Department of Agriculture and Agri-Food

Overview of meeting:

In his opening remarks, Mr. Forsyth took the committee through the timelines that led to the current negotiations; the U.K. voted for BREXIT in a referendum in 2016 that will end their four decades of EU membership and their inclusion in the CETA agreement on December 31, 2020. In September 2017 PM Trudeau met then U.K. PM May to discuss how to strengthen our bilateral relations, including in the area of trade. Shortly thereafter, officials undertook a Trade Dialogue aimed at replicating the CETA as an interim measure. GAC officials undertook consultations with implicated sectors and have been keeping them informed of developments. As of March 2019, our discussions with the U.K. were quite well advanced when the U.K. unexpectedly announced a plan to offer duty-free access on 95% of all tariff lines to all World Trade Organization members in the event of a no-deal Brexit. In May 2020, the U.K. released a new Most-Favoured Nation (MFN) applied tariff schedule, called the U.K. Global Tariff (U.K.GT). Then in June 2020, the U.K. decided it would not seek to extend the Brexit transition period beyond 2020.

Soon after these events, Canada proposed a resumption of our discussions and Minister Ng and her U.K. counterpart confirmed that officials should reengage in discussions on an interim agreement for the end of this year – with the goal of avoiding a ‘cliff-edge’ for business. During the pandemic, negotiations have continued virtually.

During the Q&A portion of the meeting, there was little discussion about specifics of the deal other than some mention of the top markets for both imports and exports. The Bloc asked for assurances that there would be no further concessions on dairy. Most of the discussion was more about process; deadlines and the mechanics, such as how the process began, why did we pursued a transitional agreement, and how could this could possibly conclude in time for Parliament to do its job before the Christmas break.

With about 30 minutes remaining in the agreed time for Q & A, CPC/Gray moved a motion that the committee invite Minister Ng to appear before December 4th.

That, pursuant to Standing Order 108(2), that the committee invite the Minister of Small Business, Export Promotion, and International Trade to appear before the Committee at any time that accommodates her schedule, before December 4, 2020, for a meeting of 2 hours on the subject of a potential transitional trade agreement between Canada and the United Kingdom.

NDP Blaikie supported. Lib Bendayan asked if it would be possible to amend the deadline from December 4th to the week of December 7th. Mr. Hoback said the Minister is too busy with multiple portfolios and Trade needs its own Minister. If she’s given the negotiators a deadline of December 31st then there is no provision for parliamentary oversight. Mr. Blaikie said that if the Minister couldn’t appear before December 11th, then this isn’t a priority. He added that it was the Government that created these deadlines, not the committee. The Liberal amendment was defeated and the CPC motion passed, and the Q&A portion resumed.

The negotiation process

The Conservatives argued that the delay in Canada negotiating a transition deal was because of the Prime Minister and mistakes of the Liberal Government. Mr. Forsyth gave a detailed explanation of the how the timelines had worked out. The Liberals suggested that most deals are concluded at the 11th hour and gave Mr. Forsyth a chance to explain that the ‘pause’ in negotiations was in the best interests of Canada.

Transitional vs bilateral

The Bloc wanted to know about sunset clauses and why the government chose to negotiate a transitional agreement first and how long would it take to negotiate a bilateral deal after the transitional was completed. Mr. Forsyth said he would expect Bilateral negotiations to commence within the next year and take possibly two years to complete. In response to a CPC question about transitional vs bilateral Mr. Forsyth said the U.K. was looking to replicate the CETA, so a transitional agreement was in Canada’s best interests.

ISDS

Several opposition members asked Mr. Forsyth to confirm that ISDS wouldn’t apply to the transitional agreement until all EU countries had ratified those provisions in the CETA. He also pointed out that the U.K. was one of the first EU countries to ratify it in the CETA.

Deadlines

The Conservatives and the NDP expressed their doubt that a transitional deal could go through Parliament without being ‘rammed’ through. When implementing legislation is tabled in the Parliament there will be probably will be considerable complaints in both Houses that Parliament isn’t being given the necessary time to do its job properly. CPC/Hoback did conclude the meeting by asking about media leaks that inferred a deal was going to be announced imminently and Mr. Forsyth said he was confident the agreement would be concluded shortly. Mr. Hoback said that he wasn’t criticizing Minister Ng, but she had too much to do and her portfolio needs to be divided between two Ministers so that International Trade has its own, a full-time Minister. During debate on CPC/Gray’s motion, Hoback said that if the Minister has given negotiators a deadline of December 31st then there is no provision for parliamentary oversight.

Other trade deals

Under questions from the government members on the committee Mr. Forsyth explained that negotiations are ongoing with the Pacific Alliance and India. The U.K. has expressed an interest in the CPTPP and Canada would support that should they wish to move ahead.

Q & A

Gray (CPC)

Sheehan (Lib)

Savard-Tremblay (Bloc)

Blaikie (NDP)

Lobb (CPC)

Bendayan (Lib)

Aboultaif (CPC)

Araya (Lib)

Sarai (Lib)

Hoback (CPC)

Follow-up

Provide committee with impact assessment. Provide committee a list of the stakeholders.

Next Meeting: Monday, November 23rd 11am-1pm. Its possible the second meeting (that was to take place Monday evening) may be postponed due to scheduling conflicts with another committee.

DCL will circulate the “blues” (unofficial transcripts) when they become available. The edited, translated transcript will be available on the within the next two weeks.

The hearing was open to the public and can be listened to via (link embedded) at any time.

If you have any questions, please do not hesitate to contact me, and to loop in others as required

Regards,

Alan

Report on committee hearing

Name of committee: Standing Committee on International Trade (CIIT)
Report prepared by: Kerri Carisse, Cabinet and Parliamentary Affairs Division, 抖淫视频
Date and time: Monday, November 23, 2020 from 11:00 a.m. to 1:00 p.m.
Location: Wellington Building, Room 420/Hybrid
Topic: Trade Between Canada and the United Kingdom: A Potential Transitional Trade Agreement

Members:

CPC: Tracy Gray (Kelowna—Lake Country, BC) Randy Hoback (Prince Albert, SK), Ziad Aboultaif (Edmonton Manning, AB) Ben Lobb (Huron—Bruce, ON)
NDP: Daniel Blaikie (Elmwood—Transcona, MB)
BQ: Simon-Pierre Savard-Tremblay (Saint-Hyacinthe—Bagot, QC)
LPC: Hon. Judy Sgro (Humber River—Black Creek, ON) Rachel Bendayan (Outremont, QC), Chandra Arya (Nepean, ON), SU.K.h Dhaliwal (Surrey—Newton, BC) Randeep Sarai (Surrey Centre, BC) 21. Canada-U.K. trade continuity agreement (Sault Ste. Marie, ON)

Witnesses:

Canadian Agri-Food Trade Alliance

Canadian Association of Importers and Exporters Inc.

Livingston International

Lobster Council of Canada

Summary

At the outset of the meeting Liberal MP Bendayan announced the conclusion of negotiation on Canada- U.K. continuity trade agreement, noting that legal review was underway. NDP MP Blaikie inquired into how French translation would factor into the legal review timeline.

Opening remarks

The committee met to hear from Canadian stakeholders about trade between Canada and the United Kingdom and the Transitional Trade Agreement, per the motion passed on October 23,

2020 (see Forward Business Agenda below). The opening remarks from the Canadian Agri-Food Trade Alliance (CAFTA) noted the need to preserve existing access and benefits with the United Kingdom and to work on removing trade obstacles. The Canadian Association of Importers and Exporters Inc.’s opening remarks outlined the need for transparency and predictability and presented three suggestions

to protect small- and medium-sized exporting businesses on January 1, 2021. These three suggestions requested the use of CETA certification to substantiate free trade service status, the adoption of the same rules of origin and certification requirements that exist under CETA, and to allow importers to certify goods if new documentation will be required. Livingston International’s remarks touched on the unintended consequences of duty deferral and the impact on the brokerage industry. Their remarks went on to request legislation to address subrogation and bankruptcy for brokers. The Lobster Council of Canada focused on the industry benefits from CETA and the need for a permanent trade agreement with the United Kingdom.

Questions from Members by key theme

Consultation process

Conservative members asked witnesses about the consultation process for the transitional agreement, with MP Gray asking if details of new provisions had been communicate to stakeholders. Bloc Québécois MP Savard-Tremblay asked witnesses if they had received information and details on the content of the Transitional Trade Agreement, to which they answered no. NDP MP Blaikie questioned if witnesses had been consulted on the cessation of negotiations with the U.K. from March to August. Liberal MP Bendayan asked witnesses to discuss the lengthy consultation process conducted during CETA negotiations.

Tariff improvements

Conservative members inquired into the tariff measures in the Transitional Trade Agreement and if witnesses advocated for specific measures, particularly focusing on tariffs for Canadian beef and pork. Liberal MP Bendayan asked witnesses to discuss reactions if tariffs from the U.K. were lifted.

Improvements from CETA (non-tariff trade barriers)

Liberal and Bloc Québécois members asked witnesses to expand on improvements they would like to see from CETA to the new agreement with the U.K. CAFTA and the Canadian Association of Importers and Exporters Inc. informed members that they would like to see the removal of non-tariff barriers. NDP MP Blaikie asked if the issues with the CETA text that resulted in non-tariff barriers could be resolved in negotiations for a Canada-U.K. trade agreement. Conservative MP Aboultaif noted concerns raised by the beef, dairy, canola and wheat industries related to CETA, asking CAFTA to expand on the Canadian beef industry’s concerns of a replication of non-tariff barriers in a Canada-U.K. trade agreement.

Sunset Clause

Noting that the Transitional Trade Agreement does not have a sunset clause, NDP MP Blaikie asked how Canada could leverage the U.K. to negotiate a permanent trade agreement. Witnesses expressed mixed opinions in relation to a sunset clause. Conservative MPs Aboultaif and Gray also inquired into the benefits of a sunset clause in the Transitional Trade Agreement. Liberal MP Bendayan clarified that a sunset clause would effectively repeal a trade agreement before the conclusion of a comprehensive trade agreement.

At the end of the meeting the Committee agreed to proceed with their interim report and amend the study once the text of the Canada-U.K. Transitional Trade Agreement was tabled.

StudyNext Meeting Dates & StepsDeadline to Complete StudyDate Study Agreed To or Referred
That, pursuant to Standing Order 108 (2), the committee undertake a study of no less than 3 meetings to: a. receive an update on the federal government’s progress in negotiations of a Canada- United Kingdom transitional trade agreement; b. hear from stakeholders affected by the implementation of a new Canada-United Kingdom transitional trade agreement; c. study the impacts of a lack of a transitional agreement with the United Kingdom being in place by December 31, 2020, when the application of the Comprehensive Economic and Trade Agreement (CETA) to the United Kingdom ends; that this study begin no later than November 13, 2020; that briefs submitted to the committee be no longer that 2,000 words; that the Committee report its findings to the House.- Friday, November 27, 2020 - Monday, November 30 – Minister Ng to appear on Canada-U.K. TTA.Interim Report in December before Christmas break Full Report late JanuaryOctober 23, 2020
That, pursuant to Standing Order 108(2), the committee undertake a study on the government’s COVID-19 recovery plan for Canadian exporters; that this study include an examination of changes to how international trade will be conducted in a world impacted by COVID-19, of what the Trade Commissioner Service is doing to prepare for these changes and help Canadian businesses navigate them, and of which agreements would be in Canada’s best interests to pursue at the present time; that the Minister of Small Business, Export Promotion and International Trade be invited to appear; that the Chief Trade Commissioner be invited to appear; that briefs submitted to the committee be no longer that 2,000 words; and that the Committee report back to the House.- TBD - Previous: October 30, 2020 (1st meeting on this study)- TBDOctober 23, 2020
That, pursuant to Standing Order 108(2), the committee undertake a study of World Trade Organization- Study may begin December 7th, 2020 (TBC)- TBDOctober 23, 2020
reform, that the evidence and documentation received by the committee during the 1st Session of the 43rd Parliament on the subject be taken into consideration by the committee in the current session, and that briefs submitted to the committee do not exceed 2,000 words.
That, pursuant to Standing Order 108(2), the committee undertake a study of the impacts of the Investor- State Dispute Settlement (ISDS) mechanism; that the committee devote a minimum of two (2) meetings to this study; that briefs submitted to the committee do not exceed 2,000 words and that the committee report its findings and recommendations to the House.- TBD- TBDOctober 23, 2020

Follow-up items

-Nil

Report on committee hearing

Name of committee: Standing Committee on International Trade (CIIT)
Report Prepared By: Kerri Carisse, Cabinet and Parliamentary Affairs Division, 抖淫视频
Date: Monday, November 30, 2020 from 11:00 a.m. to 1:00 p.m.
Topic: Trade Between Canada and the United Kingdom: A Potential Transitional Trade Agreement

Members:

CPC: Tracy Gray (Kelowna—Lake Country, BC) Randy Hoback (Prince Albert, SK), Ziad Aboultaif (Edmonton Manning, AB) Ben Lobb (Huron—Bruce, ON)
NDP: Daniel Blaikie (Elmwood—Transcona, MB)
BQ: Xavier Barsalou-Duval (Pierre-Boucher—Les Patriotes—Verchères) replacing Simon-Pierre Savard-Tremblay for the first round of questions, Simon-Pierre Savard-Tremblay (Saint-Hyacinthe—Bagot)
LPC: Hon. Judy Sgro (Humber River—Black Creek, ON) Rachel Bendayan (Outremont, QC), Chandra Arya (Nepean, ON), SU.K.h Dhaliwal (Surrey—Newton, BC) Randeep Sarai (Surrey Centre, BC) Terry Sheehan (Sault Ste. Marie, ON)

Witnesses:

抖淫视频

Summary

Opening statements

Minister Ng’s opening remarks provided an overview of the trading relationship between Canada and the United Kingdom and discussed the newly concluded negotiations for the Canada-U.K. Trade Continuity Agreement. The remarks detailed the impacts of the Agreement, highlighting the maintenance of CETA priority market access, provisions on labour and the environment, and dispute settlement. In closing, the Minister noted that preparations are underway to seek the Government’s approval on an expedited basis so that Parliament may consider the bill and ensure a smooth transition in Canada-U.K. trade relations in the coming weeks.

Questions and interventions focused on the following topics:

Legislative timeline

Members from the Conservative, NDP and Bloc Québécois expressed their concerns related to their ability to study and pass legislation before the deadline. In view of this, they were interested in knowing the timeline for legislative introduction, when the text of the continuity agreement would be shared with Parliamentarians, and the page length of the Agreement.

Conservative MP Gray asked the Minister if there was a commitment to table the legislation before December 11th. Conservative MP Hoback asked if there was a drop-dead date by which the legislation had to be passed if contingency measures were being created. Inquiring further into the legislative plan, Conservative MP Lobb questioned if Senate party leaders were consulted on the legislative process for the Continuity Agreement. Noting the similar enabling legislation in the U.K., NDP MP Blaikie inquired into the status of the legislation in the U.K. and if their legislation would pass by the deadline.

Contingency measures

Noting the January 1, 2021 deadline, NDP and Conservative MPs were interested in contingency measures the Government would put in place to ensure predictability for exporters should legislation not receive Royal Assent by the deadline. NDP MP Blaikie asked the Minister for details of non- legislative tools the Government would put in place to maintain the lower tariff trade regime. Similarly, Conservative MP Aboultaif pressed the Minister for details related to mitigation measures and the Government’s plan should legislation not pass before January 1. Likewise, Conservative MP Hoback requested details of mitigation measures and if the Government would be paying the tariffs Canadian businesses may have to pay until the legislation is passed.

Details of the Agreement

Conservative MP Aboultaif asked the Minister to discuss tariffs that have changed from the CETA Agreement. Minister Ng affirmed that there will be no tariff changes between CETA and the Continuity Agreement. NDP MP Blaikie and BQ MP Savard-Tremblay questioned the Minister about ISDS provisions in the Agreement, with MP Blaikie asking if the removal of ISDS would be a priority of the Government in a permanent trade deal with the United Kingdom. Additionally, Liberal MPs asked the Minister to discuss benefits related to SMEs, as well as communities concerned with rights for the environment, digital standards, women and the LGBTQ2I+.

Expiry of the Continuity Agreement

Members from all opposition parties were interested in the terms of expiry for the Agreement. After the Minister confirmed that no sunset clause exists in the Agreement, Conservative MP Gray asked if there was a possibility the Continuity Agreement could continue indefinitely. MP Gray also inquired into the text of the Agreement that provides a three-year timeline to complete discussions related to a permanent trade deal with the U.K.

Supply-managed sector

BQ MP Barsalou-Duval asked the Minister if the Government would maintain the transitional Agreement should the U.K. request that Canada cede market access to the supply-managed sector.

Minister Ng confirmed the Government’s commitment to protect the supply-managed sector in the future trade Agreement. Conservative MP Hoback asked the Minister what was ceded to protect supply management in the continuity Agreement, raising access to beef. Referencing the testimony of the previous week by Les Producteurs de lait du Québec, Liberal MP Bendayan asked the Minister to expand on the importance of protecting supply management for dairy farmers in Quebec and the rest of Canada in trade negotiations.

Other questions of interest

Committee business

Follow-up items

Committee’s forward business agenda

StudyNext Meeting Dates & StepsDeadline to Complete StudyDate Study Agreed To or Referred
That, pursuant to Standing Order 108 (2), the committee undertake a study of no less than 3 meetings to: a. receive an update on the federal government’s progress in negotiations of a Canada- United Kingdom transitional trade agreement; b. hear from stakeholders affected by the implementation of a new Canada-United Kingdom transitional trade agreement; c. study the impacts of a lack of a transitional agreement with the United Kingdom being in place by December 31, 2020, when the application of the Comprehensive Economic and Trade Agreement (CETA) to the United Kingdom ends; that this study begin no later than November 13, 2020; that briefs submitted to the committee be no longer that 2,000 words; that the Committee report its findings to the House.- Friday, December 4, 2020 – Review of Interim reportInterim Report in December before Christmas break Full Report late JanuaryOctober 23, 2020
That, pursuant to Standing Order 108(2), the committee undertake a study on the government’s COVID-19 recovery plan for Canadian exporters; that this study include an examination of changes to how international trade will be conducted in a world impacted by COVID-19, of what the Trade Commissioner Service is doing to prepare for these changes and help Canadian businesses navigate them, and of which agreements would be in Canada’s best interests to pursue at the present time; that the Minister of Small Business, Export Promotion and International Trade be invited to appear; that the Chief Trade Commissioner be invited to appear; that briefs submitted to the committee be no longer that 2,000 words; and that the Committee report back to the House.- Monday, December 7, 2020 - Previous: October 30, 2020- TBDOctober 23, 2020
That, pursuant to Standing Order 108(2), the committee undertake a study of World Trade Organization- Study may begin December 7th, 2020 (TBC)- TBDOctober 23, 2020
reform, that the evidence and documentation received by the committee during the 1st Session of the 43rd Parliament on the subject be taken into consideration by the committee in the current session, and that briefs submitted to the committee do not exceed 2,000 words.
That, pursuant to Standing Order 108(2), the committee undertake a study of the impacts of the Investor- State Dispute Settlement (ISDS) mechanism; that the committee devote a minimum of two (2) meetings to this study; that briefs submitted to the committee do not exceed 2,000 words and that the committee report its findings and recommendations to the House.- TBD- TBDOctober 23, 2020

Canada announces steps to ensure stability for Canada-United Kingdom trade in goods

From:

News release

December 22, 2020 — Ottawa, Ontario — 抖淫视频 The Government of Canada is committed to providing as much certainty and stability as possible for Canadian businesses affected by the United Kingdom’s decision to leave the European Union and, thereby, the Canada-European Union Comprehensive Economic and Trade Agreement (CETA).

Today, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, and the Honourable Mary Ng, Minister of Small Business, Export Promotion and International Trade, welcomed the signing of a memorandum of understanding (MOU) between Canada and the United Kingdom, which lays out commitments each country will take to ensure continued preferential tariff treatment for goods from the date CETA ceases to apply to the United Kingdom until the Canada-United Kingdom Trade Continuity Agreement (Canada-U.K. TCA) is ratified and implemented.

In keeping with the MOU, the Government of Canada has issued the Canada-United Kingdom Trade Continuity Remission Order, 2021, in immediate effect, to minimize disruptions for Canadian importers. The order ensures that tariff benefits currently afforded to eligible imports from the United Kingdom under CETA, and replicated in the future Canada-U.K. TCA, are temporarily available to Canadian importers. In exchange, the United Kingdom has agreed to provide reciprocal tariff benefits for eligible Canadian exports to the United Kingdom. The remission order is intended to remain in effect until the Canada-U.K. TCA can enter into force through respective legislative procedures.

By announcing the MOU and the corresponding preferential tariff treatment before January 1, 2021, the Government of Canada is making sure businesses can easily continue trading without adding paperwork for businesses and importers. These measures will ensure stability and certainty on both sides of the Atlantic.

Quotes

“Canada is a trading nation. With this announcement, our government will ensure Canadian businesses that trade goods with the United Kingdom continue to have preferential access. This action is important for many businesses and jobs in Canada, which benefit from the strong economic ties between our 2 countries.”

- Chrystia Freeland, Deputy Prime Minister and Minister of Finance

“The United Kingdom is a key trading partner for Canada, which is why our government has been working tirelessly to ensure continuity for our businesses and to maintain the stability and reliability of our important trade relationship with the United Kingdom. This remission order will provide certainty for Canadian importers of U.K. goods from January 1, 2021.”

- Mary Ng, Minister of Small Business, Export Promotion and International Trade

Quick facts

between Canada and the United Kingdom of Great Britain and Northern Ireland (Canada-U.K. TCA) in the House of Commons.

Canada-U.K. Trade Continuity Agreement

Latest Developments

Current Position

Background

Brexit

The U.K. officially left the EU on January 31, 2020. However, it remained part of the EU single market and subject to EU rules and regulations, including international trade agreements like the CETA, in a transition period until December 31, 2020. As of January 1, 2021, the U.K. is no longer bound by EU laws and regulations, part of the EU single market, or party to any of the EU international agreements. This means that the U.K. is no longer covered by the CETA, which itself remains unchanged and still governs trade between Canada and the EU.

In departing the EU, the U.K. wanted to end the free movement of people, stop its contributions to the EU budget, be free of the jurisdiction of the European Court of Justice, and pursue an independent trade policy. These positions precluded the U.K. from seeking to participate in the single market (the “Norway” option) or the customs union (the “Turkey” option). This led to the negotiation of a limited free trade agreement (known as the “Trade and Cooperation Agreement”), which the EU and U.K. concluded on December 24, 2020, that is mostly focused on tariff-free/quota-free trade in goods and provides little coverage for services trade, temporary entry of businesspersons, and the recognition of professional credentials. The agreement has been provisionally applied since January 1, 2021, while approval is pending in the European Parliament.

Despite the tariff-free/quota-free treatment for goods, U.K. exporters are facing new trade frictions with their largest and closest trading partner in the form of new regulatory checks and customs procedures. Overall, Brexit has a negative economic effect on both the U.K. and EU which, at this time, further exacerbates the impact of COVID-19 on the two economies.

Canada – U.K. Trade Dialogue

The Canada-U.K. Trade Dialogue was undertaken following a meeting between Prime Minister Trudeau and then-British Prime Minister May in September 2017, in which the two leaders agreed to seek a seamless transition of our trade relations as the U.K. prepared to leave the EU. Talks were well-advanced by March 2019 when the U.K. unexpectedly released a temporary tariff schedule that would have made 95% of its tariff lines duty-free for all WTO members in the event that the U.K. left the EU with no arrangements in place. This development underscored the uncertainty of the Brexit process; if implemented, the temporary

tariff schedule would have made a preferential FTA much less valuable to Canada. Discussions were temporarily paused, as it was no longer in Canada’s best interests to pursue the replication of CETA until there was greater certainty about the U.K.’s trade approaches. In May 2020, the U.K. published a significantly revised tariff schedule (the U.K. Global Tariff), which would take effect from January 1, 2021. Thereafter, in a call between Canada’s Minister for International Trade, Mary Ng, and her U.K. counterpart, Secretary of State for International Trade Liz Truss, it was agreed that negotiators should re-engage in discussions on a transitional or ‘interim agreement’ that would be put in place for January 1, 2021. On November 21, 2020, Prime Minister Trudeau and British Prime Minister Johnson announced that an agreement in principle had been reached for the Canada-U.K. Trade Continuity Agreement (TCA). On December 9, 2020, following the signature of the TCA, Minister Ng introduced Bill C-18 in the House of Commons to ratify and implement the Agreement.

Canada – U.K. Trade Continuity Agreement (TCA)

Under the TCA, Canada and the U.K. have, for the most part, substantively replicated CETA on a bilateral basis. Modifications to CETA were required in areas where it was not appropriate to transpose the CETA outcome directly, such as tariff-rate quotas (TRQs), TRQ administration, rules of origin, and investment.

Under the TCA, Canada obtained commercially meaningful access for all Canadian products subject to both transitional and permanent CETA TRQs. Canada did not provide the U.K. with any new access for supply- managed products.

The TCA addresses the unique situation brought about by the U.K. leaving the EU and ensures a seamless transition of our trade relations with the U.K. in the medium term. For the longer term, however, Canada is interested in negotiating an agreement that can best reflect the nature of Canada-U.K. trade relations going forward and take into account any post-Brexit developments. Canada and the U.K. have committed to enter into subsequent negotiations within one year of the TCA’s entry into force, and to make best efforts to reach a new agreement within three years, at which time a few key elements of the TCA would expire (such as rules of origin cumulation with the EU and access to Canada’s EU WTO cheese reserve).

The Canada-U.K. TCA was not ratified and implemented by January 1, 2021, and both parties wanted to ensure as much continuity as possible for business. As a result, Canada and the U.K signed an MOU that ensures continued preferential tariff treatment for goods from the date CETA ceased to apply to the United Kingdom until the Canada-United Kingdom TCA enters into force. In keeping with the MOU, the Government issued the Canada-United Kingdom Trade Continuity Remission Order, 2021, to minimize disruptions for Canadian importers. The order ensures that tariff benefits currently afforded to eligible imports from the U.K. under CETA, and replicated in the future Canada-U.K. TCA, are temporarily available to Canadian importers. In exchange, the U.K. has provided reciprocal tariff benefits for eligible Canadian exports to the U.K. via secondary legislation.

Moving Forward

In addition to the TCA commitment to launch new bilateral negotiations within a year of its entry into force, both Minister Ng and Secretary of State Truss have made public commitments to beginning negotiations as early as this year.

Before any launch of negotiations for a new bilateral FTA with the U.K., the Government will conduct full public consultations with Canadian stakeholders and interested parties, and follow the Policy on the Tabling of Treaties in Parliament. This includes tabling a notice of intent to begin negotiations in Parliament 90 days ahead of beginning the negotiations, as well as tabling objectives of the negotiations 30 days before the start of negotiations.

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