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Great Britain

Brexit blow: Canada refuses to roll over EU trade deal for UK - trade officials ‘furious’

The decision not to roll over the Comprehensive Economic and Trade Agreement (CETA) if Britain crashes out of the European Union without a deal on October 31 could have a huge impact on businesses selling goods to the Canadian market. Britain has insisted Canada roll over CETA, even in the event of a no deal Brexit, but the North American country is awaiting the outcome of any further talks between London and Brussels before making a final decision, a source at the Department for International Trade told BuzzFeed News. The same source told the news website British trade officials are “furious” at the embarrassing rejection, having spent the best part of a year trying to convince Canada to extend CETA.

Canada is a major trading partner of the UK, accounting for 1.6 percent of the country’s exports.

In March, before the original deadline set for later that month was extended by the EU until October 31, Britain had been set to sign a post-Brexit trade deal with Canada.

According to a diplomatic note seen by The Times, the EU’s chief Brexit negotiator Michel Barnier told European envoys the trade deal is on the verge of being finalised.

The Canadian Government told BuzzFeed News it would roll over CETA during a transition period, but warned the UK and EU “to agree on their future relationship as soon as possible.”

brexit uk canada trade deal

Brexit news: British officials are 'furious' at the rejection from Canada (Image: GETTY)

Canada is watching Brexit closely and encourages the UK and the EU to agree on their future relationship as soon as possible

Canadian Government

A spokesperson said: “Depending on an agreement being reached between the UK and the EU concerning a transition period, Canada would consent to the UK remaining party to CETA and all other Canada–EU agreements during that transition period.

“Canada is watching Brexit closely and encourages the UK and the EU to agree on their future relationship as soon as possible.”

A spokesperson for Canada’s global affairs department told BuzzFeed News: “In case of a no-deal Brexit, Canada and the UK had been discussing a transitional agreement based on CETA while recognising the UK’s lack of jurisdiction to negotiate a free trade agreement as long as it remains an EU member state.

“In the event that the UK leaves the EU without an agreement, it has proposed to provide all WTO partners, including Canada, with duty-free access for 95% of tariff lines.

“Post-Brexit, any future trade arrangement between Canada and the UK would be influenced by the terms of the withdrawal agreed between the UK and the EU, as well as any unilateral UK approaches.”

Brexit Michel Barnier

Brexit news: Michel Barnier had told EU envoys in March a UK-Canada trade deal was close (Image: GETTY)

The DIT has attempted to play down the apparent spat and lack of progress in securing lucrative trade deals with a number of countries after Brexit.

A spokesperson said: “The UK and Canadian prime ministers agreed to ensure a seamless transition of CETA and we remain committed to doing so.”

“We are continuing to work on securing continuity with other countries.

“Only three weeks ago, we agreed in principle to transition our agreement with Korea.

“Once it is signed, we will have agreements covering 63 percent of our trade with countries for which we are seeking continuity.”

In 2017, International Trade Secretary Liam Fox vowed to have 40 EU trade deals replicated by the time Britain left the EU.

Brexit concerns and hopes

Brexit news: The concerns and hopes of Brexiteers and Remainers (Image: EXPRESS)

Both Boris Johnson and Jeremy Hunt have said they would attempt to renegotiate the withdrawal agreement with Brussels - despite EU bosses insisting this won’t happen - and would resort to a no deal Brexit if this proves unsuccessful.

But it is unclear what either of the leadership candidates would mean in practice for the UK’s exporters and importers.

Mr Fox will face MPs in the House of Commons later today, and will likely be grilled on the slow progress his department has made in replicating the 40 trade deals.

As of last month, just 11 deals had been rolled over, including those with Switzerland and Israel.

In a letter to International Trade Select Committee chair Angus Brendan MacNeil, Mr Fox insisted talks with several other countries, including Canada, were “at an advanced stage” and “making progress”.

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