Workers on the production line at Chrysler’s assembly plant in Windsor, Ont., work on a minivan on January 18, 2011. (Geoff Robins/Canadian Press)
Since the United Kingdom is no longer part of the European Union, those rules expire on March 1. Exports from the now-independent British automotive industry are set to lose their preferential access to the Canadian market.
Automotive trade in and out of Canada is subject to a tangled web of trade agreements, each with different rules: CETA for the EU, the revised North American trade agreement for the U.S. and Mexico (known as CUSMA), the Comprehensive and Progressive agreement for Trans-Pacific Partnership that liberalized automotive trade with Japan, and Canada’s bilateral trade agreement with South Korea.
British vehicles risk landing outside these competitive, tariff-free supply chains if the two sides can’t find a way forward.
Riskier for U.K. than for Canada?
Failure to reach a deal with Canada before these cheese and automotive deadlines pass could hurt British exports. From Canada’s strategic perspective, there’s less immediate economic urgency to reach a deal.
A specific quantity of Canadian beef and pork exports was supposed to gain access to the European and British markets when CETA took effect, but imports have been held to practically zero because Canadian standards aren’t recognized as compliant.
Ng told reporters that this friction in the bilateral talks with the U.K. is a issue separate from Canada’s ratification process for the British to join the CPTPP. The final terms and text for that accession were agreed to in the summer, but each current party to that trade agreement must complete its own ratification process. In Canada, that requires a parliamentary consultation process at committee and the passage of implementation legislation before cabinet ratifies the expanded treaty.
Ng said that at the moment, the government is focused on ratification of the revised Canada-Ukraine trade agreement — that bill has yet to clear Parliament.
In the absence of the bespoke bilateral agreement these negotiations were trying to land, Canada’s current trade continuity agreement with the United Kingdom will stand indefinitely to keep tariffs off other products shipping between the two countries. But this “CETA rollover” deal was intended to be only a transitional arrangement until something more comprehensive could be worked out.
Negotiators have completed eight rounds of talks since 2022 and were scheduled to meet next month in the U.K. Those meetings now will not proceed.
The United Kingdom is Canada’s third-largest trading partner, worth over $46 billion in two-way goods and services trade in 2022.