International Trade Minister Mary Ng is expected to introduce legislation this afternoon to implement the newly signed Transitional Trade Agreement between Canada and the United Kingdom – but it is unlikely to become law before the government’s December 31 deadline.
According to a statement issued by the British High Commission, the British Deputy High Commissioner for Canada David Reid and John Hanford, Canadian Deputy Minister of International Trade, signed the treaty in Ottawa on Wednesday morning. There was no public ceremony or media access at this event.
“At a time of great uncertainty amidst COVID-19, this continuity and predictability are crucial for all Canadians,” Ng said in a statement. “Canada and the United Kingdom will now move forward with their domestic procedures to ratify and implement the new trade agreement.”
Global Affairs Canada is preparing to release the legal text of the Trade Continuity Agreement between Canada and the United Kingdom (TCA) to coincide with the introduction of the bill, followed by briefings for business groups and other stakeholders. These briefings are support to provide a more complete picture of what’s in store than what was presented when the two countries announced that they had reached an agreement on November 21.
On January 1, the current rules governing trade between Canada and the United Kingdom will end with the onset of Brexit and the British government will assume full responsibility for its trade policy independent of the European Union.
The trade secretary has promised to work with her UK counterpart to mitigate the short-term effects of the lack of new measures.
So far, trade with the UK has been liberalized under the terms of the Comprehensive Economic and Trade Agreement (CETA). Although not fully ratified by all EU member states, the bulk of the CETA measures came into effect in 2017.
Had no deal been reached to cover future bilateral trade with Canada, new tariffs and other restrictions could have hurt Canadian and British companies this winter.
Instead, the New Deal temporarily “passes”, or duplicates, most of the CETA terms for the near future, giving both countries more time to consider which arrangements they want to implement permanently.
However, the new implementation bill is unlikely to be passed before the end of the year. The House of Commons is due to rise for a recess on Friday.
“Working to ensure no disruptions”
Naj and played down the risks of not fully ratifying the transitional agreement and its readiness for implementation in the new year.
But the Canadian government has not released any details of the interim measures it is working on with the British government to avoid new trade barriers that disrupt reciprocal trade in goods and services and investment with its fifth largest trading partner. For example, the two sides could come to an understanding that customs duties payable on each other’s products will not be collected until the implementation legislation is passed.
“I want companies to know that this is my top priority, making sure they have this predictability as the end of the year approaches,” Ng said after Monday’s cabinet meeting, adding that the transition deal “maintains the high standards that we have at CETA.”
She said, “We are working fully to ensure that there is no impact or disruption to our business.”
Watch | What we know about the temporary trade agreement between Canada and the United Kingdom:
The two countries agreed to “renew” the Comprehensive Economic and Trade Agreement (CETA). 5:35
Both countries have committed to negotiating a more comprehensive and sustainable trade deal in the new year.
There is no specific date for the terms of the transitional agreement, but parliamentarians in the House of Commons Trade Committee have been informed that the text of the agreement stipulates that the two parties intend to end their bilateral negotiations by 2024.
According to federal government policy, commercial treaties are supposed to go to Parliament 21 days before the introduction of implementing legislation – a bill that changes laws and regulations to comply with the new agreement – for discussion.
It does not appear that this policy will be applied to this transition deal between Canada and the United Kingdom.
Tackling a “train wreck”
Responsibility for ratifying trade agreements rests with the federal cabinet, but before the agreement is finalized, Parliament needs to pass implementing legislation so that Canada is ready to comply on the date it comes into effect.
Enforcement laws can include changes in tariff schedules, intellectual property rules, or health and safety regulations. Before this TCA legal text was released, it is not clear how much change would need to be changed between tariff rates and other rules that already existed for trade when the British were part of the European Union.
When implementing legislation for the revised North American Trade Agreement was speeded up by Parliament last spring, the Trudeau government agreed to demands from the opposition to participate in a more comprehensive consultation process for future trade deals.
“This operation was a train wreck,” said Daniel Blakey, NDP trade critic, who led the fight for assurances that things would work differently next time.
“By omitting the lapse clause, this minority government appears to have entered into a permanent trade agreement with almost no stakeholder consultation or parliamentary participation.
“Negotiations toward a subsequent agreement is an opportunity to get the process right. Parliament and the public need to be involved early and often. The TCA process cannot be allowed to set a precedent for how these deals will be implemented.”
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