Mr. Speaker, it is indeed with great pleasure that I too rise virtually in the House of Commons today in support of our proposed legislation to ratify the agreement on trade continuity between Canada and the United Kingdom. Just as we welcomed the recent signing of this important agreement, the government is also very pleased to take the next step toward ratification so Canadian exporters can take full advantage of the agreement's benefits.
As we know, Canada and the United Kingdom have historically enjoyed advantageous commercial relations, which we have built together over more than 150 years. Two-way merchandise trade between us amounted to $29 billion in 2019, making the U.K. Canada's fifth largest trading partner after the United States, China, Mexico and Japan. In fact, Canadian exports to the U.K. have increased by over $2 billion since the Canada-EU Comprehensive Economic and Trade Agreement, or CETA, as it is commonly known, was provisionally applied in 2017.
Preserving this trading relationship means businesses will continue to have unprecedented access to the U.K.'s 66 million consumers and $3.68-trillion market. It also means lower prices and more choices for Canadian consumers and either a reduction or complete elimination of customs duties. Because this agreement is based on CETA, an agreement Canadians are already very familiar with, it provides the predictability and stability our businesses have told us they need as they grapple with the uncertainty brought on by this global pandemic.
The agreement on trade continuity brings with it significant, tangible benefits for Canadians. Once the agreement is fully implemented, it will carry forward CETA's tariff elimination on 90% of Canadian products exported to the United Kingdom. It will fully protect Canadian producers of all supply-managed products. It will maintain priority market 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. It will continue to balance investor protection with Canada's prerogative to regulate in the public interest, and it will uphold and preserve CETA's high standard provisions on labour and the protection of the environment.
This agreement will also continue to give Canadian companies a leg up on competitors in countries that do not have a free trade agreement with the U.K.
Indeed, Canadians welcomed the news of this agreement and the successful work of our negotiating team. I would like to expand on how critical our successful negotiation of this agreement is for the Canadian agri-food and agriculture industry.
Quebec is the home of the most dairy farmers in the country. It is followed by Ontario, Alberta and British Columbia. We know that farmers working hard right across this country wanted and needed the stability that this agreement provides. This is also the case for our beef producers. The first thought that comes to mind for me is the incredible beef exported out of Alberta and Ontario. I had the opportunity to engage directly with our beef producers and cattle feeders prior to the conclusion of the negotiations to hear their needs and interests and make sure that they were taken into account.
I would also like to give much credit to the Canadian Agri-Food Trade Alliance, or CAFTA. As Claire Citeau of CAFTA said during her testimony before the international trade committee:
This is an important first step to ensuring that exporters preserve the existing access and benefits that are already in place. The temporary certainty and stability that a transitional agreement provides is welcome news for some of our members and the reason we call on parliamentarians to work together to pass this agreement....
I am urging all members to listen to the call of our agriculture sector to swiftly ratify this agreement. We have some incredible associations representing the interests of our Canadian farmers and producers. They are engaged. They are well informed. They are targeted, and they are in constant contact with us, as they should be. Their engagement has been critical, and I certainly look forward to continuing to work with them in the next phase of the negotiation process toward a comprehensive bilateral trade agreement.
I want to emphasize what a success this agreement is for our dairy farmers. Not one additional ounce of foreign cheese will enter the country under this free trade agreement.
As Daniel Gobeil, president of the Producteurs laitiers du Québec, so aptly said, “The government has granted no additional access to the United Kingdom, in keeping with the commitment made by the Prime Minister and the Minister of Agriculture.... I therefore thank the government for keeping its commitment. This clearly shows that it is possible to enter into trade agreements without sacrificing supply management.
Canadian small and medium-sized businesses have also been very vocal. What they told us they needed most at this time, this turbulent time of crisis, is stability, stability in their trading relationships and stability in exporting their products, and this agreement fully delivers.
The agreement on trade continuity will enable many Canadian businesses that have come to depend on their U.K. clients avoid an unnecessary setback. Without this agreement, some Canadian businesses would come up against new obstacles and higher costs when doing business with the U.K.
Let me briefly paint a picture of what would have resulted if our government had not been as successful as it was, and if we had been unable to conclude a transitional trade agreement with the U.K. It is estimated over one billion dollars' worth of Canadian exports to the U.K. would have been subject to tariffs, and these tariffs would disproportionately affect our fish, seafood and agriculture exporters.
In addition to the tariffs placed on Canadian products being exported to the U.K., roughly 25% of all products imported from the U.K. would also be affected, with Canadian importers paying higher prices to bring in those goods, goods that our Canadian companies often need in order to operate, produce and grow.
Once ratified, the Canada-United Kingdom Trade Continuity Agreement will continue to be in place as we work toward a new bilateral comprehensive free trade agreement with the U.K. Indeed, this continuity agreement stipulates explicitly that within one year of ratification by both countries, the U.K. and Canada must come back to the negotiating table in order to conclude a comprehensive, longer-term trade agreement.
I know the minister and I look forward to leading a broad consultation process with Canadians from right across the country and in different sectors of our economy to ensure these future negotiations are directed in the best interests of Canada and respond to any post-Brexit developments.
With the time I have remaining, I would like to turn to some of the broader implications of our work as a government on international trade. Our Canadian government has been a leader among nations globally in advocating for free trade and stemming the tide of protectionist leanings. Indeed, we believe the contrary. Strong global trade partnerships, like our new agreement with the United Kingdom, are increasingly necessary and important, especially in these uncertain times, especially as other countries are looking to turn inward.
I am therefore asking all members from all parties to support Bill C-18's timely ratification and passage, and in so doing carefully consider not only the importance of this particular agreement for our Canadian farmers and producers, Canadian SMEs and all our exporters big and small, but also the message it sends to the world about the importance of keeping trade open and keeping Canada at the forefront of the advocacy on free trade. History will thank us for it.