The UK thought they had finally left the EU. Except, they didn’t really.
Many people thought that the UK had finally left the European Union (EU) back in January. However, that was only the midpoint of the whole process, and the UK must keep signing new trade deals to finish it. Out of the countries they must sign with, Canada is of particular importance.
Will the new Canada–UK trade deal be more similar or completely different?
Many diplomats, economists, and lobbyists put a lot of work into the trade deal between Canada and the EU. Prime Minister Boris Johnson seems keen on the trade deal rolling over by the end of the year. Currently, the United Kingdom imports approximately £8.4 billion ($14.41 billion) worth of goods and exports about £5.7 billion ($7.65 billion) worth of goods. However, Prime Minister Justin Trudeau does not seem as keen on rolling over the deal. The main issue is that the UK has somewhat undercut its position. Back in 2019, when it seemed like a no-deal Brexit was a real possibility, the UK slashed its global tariff schedule to prepare for the worst. This left little incentive for Canada to work with to establish a new free trade deal, making Prime Minister Johnson revise some of these no-deal tariffs to give themselves more bargaining power.
More intangible concerns
For any free trade deal to work for Canada, it must allow for an increase in trade and services and also allow professionals to move more freely between the two nations. The coronavirus has put nearly every other matter on the backburner, and while Prime Minister Johnson could not have predicted a global pandemic, he did seem to underplay the massive amount of work that would have to be done with regards to establishing new trade deals.
So, what happens next? The ideal outcome would be the two countries working out a deal similar to their trade deals back when the UK was still a part of the EU. But with the pandemic and other issues to care for, this deal could fall out of focus and be disastrous. Small and medium-sized enterprises (SMEs) need somebody looking out for them. Whether it’s helping SMEs unlock new markets under vast new trade deals or insulating themselves from the damage of more tariffs, Export Portal is here to help. To learn more about how you can trade in a secure and trustworthy environment, make sure to check out our site!
World merchandise trade is set to plummet by between 13 and 32% in 2020. How will this affect the economy?