Now the British Chambers of Commerce (BCC) has raised the question of what happens next and its predictions do not make cheerful reading for a range of exporters.
For example, cheese and dairy exporters in the UK must now access the non-EU quota for Canada cheese and dairy imports and will face fierce competition to access this quota from Mexican and Swiss exporters, with long-standing contracts and supply chains into the Canadian market.
To complete the gloomy picture, any exports that UK cheese makers agree outside of the quota will face tariffs of 275%.
The BCC also points out that, at the end of March, UK businesses will lose the ability to cumulate EU content in goods they make and sell to Canadian customers. Currently these goods are subject to tariff preferences in the UK-Canada continuity trade agreement.
From April onwards, any EU content in these manufactured items will be classified as non-originating content. If EU parts cannot be counted then firms could see the qualifying content for tariff free trade slip below the minimum percentage.
“That means tariffs will apply to those goods,” the BCC explained. “For the automotive sector, with annual sales of cars worth £784 million to Canada, this will run into tens of millions of pounds per year. Other manufacturing sectors will also be affected. ”
Finally, it notes that the prospects of a resumption of talks before elections in the UK this year or Canada, likely next year, are minimal.
And, on a more positive note, apart from the rules of origin changes and the specific tariffs on cheese, the UK will be able to continue to trade with Canada on the basis of its existing agreement.
