Mr. Speaker, it is a pleasure to engage in another trade debate. As members know, trade is very close to my heart.
The United Kingdom and Canada have a long and common shared history. We have common values, we are trusted allies and we also have a long history of doing business with each other. In fact, today, the U.K. is Canada's fifth-largest trade partner and that drives prosperity and economic growth in our country and in the U.K. However, to be fair, our exports to the U.K. are primarily minerals, chiefly gold, while imports from the U.K. are comprised mainly of high-end manufactured goods.
The challenge for Canada is to increase the value of the goods we ship abroad, especially to the U.K. Our trade surplus with the U.K. is somewhere around $10 billion, but I would not crow too much about that. There is this imbalance between high-end manufactured goods and minerals, such as gold, that we ship to the U.K.
It would also be a mistake not to mention our services trade, which is very significant. A lot of Canadians do not understand that when we are talking about services trade, we are talking about things like engineering, some of the highest-paid jobs in Canada. When we do business with another country, when we sell engineering services to a place like the U.K., this is about Canada exporting high-value services and driving the growth of the economy in Canada.
Suffice it to say that trade is a key driver of economic growth and long-term prosperity in Canada, and the U.K., as one of our largest trade partners, is a country we have to engage with when it comes formalizing our trade relationship.
What is the challenge as we move forward?
We have always traded with each other, but for decades the U.K. negotiated trade agreements only as a part of the European Union, and much of its former negotiating expertise and power was ceded and vested in the EU's government in Brussels.
In 2009, former prime minister Stephen Harper had the foresight and vision to begin negotiations on a free trade agreement between Canada and the EU. This would take trade between Canada and the EU to a whole new level. I had the honour of leading that effort on behalf of Canada for some four and a half years.
On September 26, 2014, I joined European Commission President Barroso, European Council President Van Rompuy and Prime Minister Harper in Brussels to announce the end of those CETA negotiations, the trade agreement between Canada and the European Union.
One point of note is that our Liberal friends like to claim credit for all the trade successes of the previous Harper government. In the military, they call it stolen valour, something about which the Liberals know a little. They love to take credit for things that rightly were accomplished by others.
Let me be very clear that the CETA agreement with the then 27 countries of the EU was the brainchild of Stephen Harper. It was under his government that negotiations were commenced and substantively completed. Over the last few years, that CETA agreement has governed our relationship not only with the EU but with the U.K. As my colleague just mentioned, our trade with the U.K. is up by about $2 billion a year, again, driving economic growth in Canada.
The CETA agreement that Stephen Harper negotiated was arguably the most comprehensive, progressive and forward-looking 21st century trade agreement in the world. It liberalizes trade through broad tariff elimination. It promotes and protects investments. It opens up government procurement and includes rigorous intellectual property protections, dispute resolution and disciplines on sanitary and phytosanitary standards. It protects culture and our cultural industries. It contains some of the strongest commitments ever included in a free trade agreement to promote labour rights, environmental protections and sustainable development. We had expected that agreement to govern our commercial relationship with the European Union for decades to come, including our relationship with the U.K. Then Brexit happened.
Without trying to divine the exact reasons for the U.K. deciding to leave the EU, the British people freely voted to leave the EU and regain their sovereignty over policy-making, and that included trade policy. In the short term, that meant the U.K. was left with no trade agreements with any of its closest trade partners, including Canada, and the British government had to scramble to find the people necessary to competently negotiate trade agreements. Its top priority was securing a new trade agreement with the European Union to assure its most favoured relationship with Europe. Then there was Canada, with which the U.K. no longer had a trade deal since the U.K. was no longer part of the CETA agreement.
Therefore, what was the fix going forward? The solution was to replace CETA with a bilateral trade agreement, Canada and the U.K., which would preserve its trade with Canada without either side incurring economic harm.
That brings us to the debate we are having today, the Canada-UK Trade Continuity Agreement. As its name implies, it is more about preserving and carrying over our CETA benefits and obligations than carving out new territory on trade liberalization. It was unfortunate that the Liberal government and its trade ministers inexplicably chose to delay these negotiations and refused to engage with the U.K. for over a year. That, in turn, meant there was a last-minute rush by the government to rush through the legislation before the new year. When that did not pan out, the Prime Minister, sadly, turned to blame shifting, as my colleague from Kelowna—Lake Country mentioned. The Prime Minister claimed that the delays in finalizing this deal were because the U.K. did not have the bandwidth to negotiate.
The agreement was finally concluded, with really no substantive changes to the rights that each of our countries have under CETA.
What does this mean?
Someone recently referred to this new agreement with the U.K. as a “nothing burger”, suggesting that because there was nothing new in this agreement, there was little of value to praise. Although it is true that not much new policy ground was plowed, this trade agreement means absolutely everything when it comes to protecting our preferred bilateral relationship with the U.K.
The alternative would have been to leave us with no trade agreement at all, only with a much less advantageous benefits of the floundering World Trade Organization. Essentially, we would be returning to the wild, wild west of trade, and that is certainly not what either party wanted.
With this Canada-UK Trade Continuity Agreement presently before us, we are left with a status quo agreement that preserves our current trade and investment relationship under a clear set of liberalizing rules, and that is good news for the residents of Canada.
What does the future look like beyond this continuity agreement we are debating here today? Both parties have committed to pursuing an even more ambitious trade and investment agreement in the future. That negotiation would reflect the unique characteristics of the Canada-U.K. relationship, including our similar economies and social structures, our common approaches to foreign policy, security and defence and our common shared approach to freer and fairer trade around the world.
We have three options to further our relationship with the U.K. The first is to take this agreement further by negotiating a more ambitious bilateral trade agreement with the U.K., using these unique characteristics to further eliminate trade barriers and expand investment opportunities. This might perhaps include greater regulatory alignment and broader mutual recognition of credentials.
However, what a lot of people do not realize is that Canada is part of the CPTPP and the U.K. has applied, or is in the processing of applying, to join the CPTPP. The U.K. has signalled its intention to join CPTPP because it knows that in the CPTPP it would make common cause with Canada and the other TPP partners in the Asia-Pacific region as a counterweight to China's belligerence and hostility in the region.
The COVID pandemic and China's increasing belligerence on the world stage make it highly advisable for like-minded nations to make common cause to counteract China's efforts to control and manipulate our system of global rules-based trade, and CPTPP is the perfect vehicle for doing so.
