Thank you very much, Madam Chair and honourable members, for the invitation to appear before the House Standing Committee on International Trade to provide an update on the Canada-U.K. trade dialogue, based on the Canada-EU Comprehensive Economic and Trade Agreement, or CETA.
Our government remains committed to supporting Canadian businesses through economic recovery and beyond.
That is why I was happy to announce on November 21, alongside the Prime Minister and our British counterparts, that we have successfully concluded negotiations on the Canada-U.K. Trade Continuity Agreement.
The U.K. is our fifth-largest trading partner globally. In 2019, two-way merchandise trade with the U.K. amounted to $29 billion. This meant opportunities for our businesses and thousands of good jobs for people in both countries.
This agreement ensures Canada and the U.K. can sustain—and build upon—that relationship by preserving the main benefits of CETA.
More importantly, as it is based on CETA, an agreement Canadians are already familiar with, it provides continuity, predictability and stability for Canadian businesses, exporters, workers and consumers, which is more important than ever as we grapple with COVID-19.
Once the agreement is fully implemented, it will preserve CETA's tariff elimination on 98% of Canadian products exported to the U.K.;
fully protect Canadian producers of all supply-managed products;
maintain priority access for Canadian service suppliers, including access to the U.K. government's procurement market, which is estimated to be worth approximately $118 billion annually; continue to balance investor protections with Canada's right to regulate in the public interest; and finally uphold and preserve CETA's high-standard provisions on issues like women, small businesses, the environment and labour.
Canadian businesses have told us that what they want most at this time is stability, and this agreement would provide that.
Of course, we look forward to working towards a new comprehensive bilateral free trade agreement with the U.K. that best serves Canada's interests over the long term, including through strong provisions on women, the environment, small businesses and the importance of digital trade.
And we will continue to seek Canadians' views to ensure that post-Brexit negotiations and agreements with the U.K. continue to reflect Canada's interests.
Before I go any further, allow me to elaborate on how this continuity agreement between Canada and U.K. came to be and why preserving preferential access to the U.K. is a key priority for our government.
When the U.K. decided to leave the EU single market, customs union and free trade area, that decision drastically affected the U.K.'s trade and economic relations with its largest trading partner, the EU, as well as with Canada, of course.
I need not remind you that once the Brexit transition period ends on December 31, the country will no longer be party to CETA.
While we continue to closely monitor developments in the Brexit process to see how Canadian interests might be affected, we also realize that it is in Canada's best interests to conclude a stable, mutually beneficial continuity agreement with the U.K. that serves to mitigate Brexit uncertainty.
That is why we have been working on a smooth transition and a path to follow for the future between our two countries.
I know that many of you are wondering why we did not conclude this agreement earlier. Allow me to explain how we got here.
When Prime Minister Trudeau and then-U.K. Prime Minister May met in September 2017 to discuss ways to strengthen our bilateral relations following the U.K.’s decision to leave the EU, both pledged to make the transition as seamless as possible and sought to preserve CETA’s preferential trade agreements. Although the U.K. was still a party to CETA and therefore not able to undertake new international trade negotiations, preliminary discussions began regarding converting the terms of CETA to a bilateral agreement.
If members recall, at that time there was still much uncertainty surrounding whether the U.K. and the EU would reach an agreement on the U.K.’s departure, or whether the U.K. Parliament might reverse the course of Brexit. At times we were close to arriving at a deal, but the ever-changing circumstances of the U.K.'s exit from the EU made it virtually impossible to conclude a deal that would be in the best interests of Canada. Canada even had to pause negotiations when the U.K. abruptly announced a new tariff rate schedule that would have wiped out any benefit Canada would gain from a trade deal with the U.K.
Then in June of this year the U.K. announced its decision not to seek an extension to the Brexit transition period.
It was in this spirit that Secretary Truss and I reopened negotiations and committed to concluding a trade continuity agreement to provide certainty for our businesses.
As we approach the end of the U.K.'s participation in CETA, the successful conclusion of this agreement goes a long way to minimizing disruptions for Canadian businesses at this critical time.
That is why negotiators are working diligently to finalize the legal texts in both official languages.
It’s also why preparations are under way to seek the government’s approval for signature of the trade continuity agreement on an expedited basis so that Parliament may consider the bill.
Lastly, it is why we are also preparing for all scenarios, including mitigating measures that would ensure business flows are not temporarily disrupted under any circumstances in the event that Parliament is not in a position to pass implementing legislation before the end of 2020.
Throughout this process, Canada has continued and will continue to support Canadian companies doing business with and in the U.K. and the EU through what I call the team Canada approach to trade.
This is critical to Canada's economic recovery and future prosperity.
That is the message I will carry with me later this week as I begin a series of events to mark CETA's third anniversary and engage with Canadian businesses to learn more about their concerns, interests and priorities, as well as opportunities for growth.
Madam Chair, let me conclude by saying that the trade continuity agreement with the U.K. is good for Canadians and for the people of the U.K.
It is good for the strong, mutually beneficial relationship that our nations have built over more than 150 years. While CETA will continue to govern Canada-EU trade, this continuity agreement will continue to provide the predictability and remove uncertainty for Canadian businesses doing business with and in the U.K.
I would note that I was happy to speak with my critics from each party this past week on this important topic. I look forward to working with them and with my colleagues on all sides of the House to ensure a smooth transition in the Canada-U.K. trade relations in the coming weeks and a better outcome for Canadians in the months and years to come.
Thank you, everyone.
I look forward to your questions and our discussion.
Thank you, Madam Chair.
