Britain, stop thinking you can rely on Canada for a Brexit trade deal. We're not that keen on doing business with you

While the UK might have its sights set on a Canada deal with its Commonwealth partner, such a proposal feels to us like the equivalent of a distant third cousin showing up at your office unexpectedly with a business plan

Chantal da Silva
Wednesday 30 November 2016 12:45
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UKIP Leader Nigel Farage MEP speaks at the final 'We Want Our Country Back' public meeting of the EU Referendum campaign on June 20, 2016
UKIP Leader Nigel Farage MEP speaks at the final 'We Want Our Country Back' public meeting of the EU Referendum campaign on June 20, 2016

In the Government's most recent Brexit-related gaffe, a handwritten note carried by an MP’s aide after a meeting at the Department for Exiting the European Union appeared to reveal some of the country’s biggest plans following its break from the EU. Among those proposals was a plot to lay the groundwork for a potential “Canadian deal”.

And after the Commonwealth country recently signed off on Ceta (the Comprehensive Economic and Trade Agreement) with the EU, why not? Sure, it took seven years of deliberation, but if the EU can do it, Britain can too. Or at least that seems to be the stance the British Government has taken in its bid to “have its cake and eat it too”.

While it’s true Canada values its ties to the United Kingdom, if the Government is hoping for a swift trade deal with its friends across the Atlantic, it shouldn’t hold its breath. The country’s finance minister Bill Morneau told the Financial Times just last week that while Canada would be open to striking a trade deal with the UK, the prospect isn’t high on its immediate to-do list. In fact, it probably doesn't make the list at all.

“We’re not talking as much about Brexit as you are in the UK,” Morneau said, a chilly wake-up call that for much of the world, Brexit is starting to look rather more like a mess that Britain should have to clean up for itself than an opportunity to do business.

“From our perspective,” Morneau explained, “clearly the Nafta [North American Free Trade Agreement] relationship [with the US] is of huge importance.” He added: “And then the Ceta relationship [with the EU] opens up a very significant market.” With Ceta, the EU has become Canada’s second largest trading partner in goods and services – and if the country is looking for a third, Britain is not a likely choice.

“Our opening of exploratory talks with China... we do see as important,” Morneau said. And if the message wasn’t clear enough, the finance minister added: “As the UK figures its next steps... that will be important too.”

Morneau told the newspaper that he had not even given enough thought to the “concept” of a Commonwealth trading bloc to craft a proper statement on the subject. So while the UK might have its sights set on a Canada deal with its Commonwealth partner, such a proposal feels more like the equivalent of a distant third cousin showing up at your office unexpectedly with a business plan.

The reality, at the moment, is that Canada can’t be bothered with Brexit. Why? Perhaps because the country’s attentions are currently occupied with recent developments down south.

President-elect Donald Trump has called Nafta, the trade agreement between Canada, Mexico and the United States which was signed into law in 1994, the “worst trade deal in history”, blaming it for the loss of manufacturing jobs in America. He’s made it more than clear that he hopes to either renegotiate the deal or terminate it altogether.

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Morneau has said Canada has not yet had the chance to discuss Nafta with Trump, so ensuring that trade deal – which sees more than $2bn a day of back and forth trade between the two countries – does not get axed under a Trump government is likely front and centre in the finance minister’s mind.

In short, negotiating and maintaining international free trade deals is no piece of cake. Canada’s trade deal with the EU took just under a decade to hash out and nearly fell apart at the eleventh hour. And if the UK wants to get in on the action with its own cross-Atlantic trade deal, the Canadian government’s message seems to be crystal clear: you’ll just have to wait your turn.

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