Daily Management Review

Interim Trade Deal To Avoid Post-Brexit Tariffs Very Close Between Canada And Britain: Reports


An interim agreement on free trade between the United Kingdom and Canada are very close to be completed, said reports citing sources with knowledge of the matter. The interim trade agreement will work after Brexit and will be in force until such time that a new bilateral agreement is approved by the Canadian Parliament.
The reports quoting sources said that a bridging mechanism that will allow both the sides to temporarily waive tariffs on trade is currently being discussed between the two sides. It was likely that the deal would designed in the form of a memorandum of understanding which could be agreed to be the Canadian government without the need for the country’s legislators approving of the deal.
If the deal goes through, it would mean that both sides can go on not imposing any tariffs on each other’s products after the UK leaves the European Union on January 31 after the end of the transition period for Brexit following the setting in of the separation in January this year.
In order to protect the flow of C$29 billion ($22.7 billion) worth of goods between them form any new tariffs according to the rules of the World Trade Organization after Brexit sets in in January next year, the two countries struck a roll-over trade deal on November 21.
But the roll-over trade deal was not approved prior to the Canadian House of Commons ending its fall session on December 11. That meant that the two sides would have to, at least in theory, begin imposing tariffs on each other’s products starting January 1.
"Something should be announced in the next couple of days. This is a story of continuity - businesses will not have to pay tariffs," said reports quoting anonymous sources with knowledge of the matter and the situation.
The recent talks between the two parties had been very fruitful and they had even ruled out imposing any tariffs, claimed the reports quoting sources.
Canada's House of Commons is due to return on January 25.
With the UK preparing to formally and finally leave the European Union at the end of the transition period, the country has also attempted to successfully negotiated multiple rollover bilateral deals so that free trade with other countries could continue. Many of the trade agreement that the UK has struck with other countries have simply replaced the terms and conditions of trade that those countries already have with the EU.
Ottawa was "actively working with Britain on mitigation measures to ensure that there is a smooth transition", said a spokeswoman for Canadian Trade Minister Mary Ng.
There was no comment available on the issue from the UK government as well as the British high commission - or embassy - in Ottawa.