Question Period Note: Brexit and Implications for the Canada-European Union (EU) Comprehensive Economic and Trade Agreement (CETA)

Update on Canada-U.K. negotiations on a transitional trade agreement (the Canada-U.K. Trade Continuity Agreement) that would enter into force when CETA no longer applies to the U.K.

• Where Brexit has introduced uncertainty for our trade relationship, our priority has been to provide as much predictability as possible for Canadian businesses.
• Once concluded, the Trade Continuity Agreement will be readied by Canada and the U.K. for signing. Following signature, both sides will proceed with their respective domestic approvals.

• For Canada, that means tabling in this House of Commons for debate and parliamentary scrutiny in accordance with established practice.
• The Government of Canada will seek timely parliamentary approval of the Trade Continuity Agreement. I urge all members to support an agreement that helps preserve Canada's trade interests with our U.K. partners.
• The effect of Brexit and the U.K. decision to leave the EU and the CETA have created uncertainty for our trade - and may result in a return to Most-Favoured Nation trade between Canada and the U.K. until the Trade Continuity Agreement can be put in place.

In June 2016, the U.K. voted by a narrow margin to leave the EU after over four decades of membership (Brexit). Outside the EU, the U.K. can no longer be a party to the Canada-EU CETA, which, since its provisional application, has served to further strengthen our important bilateral trade and investment relationship. In order to avoid the loss of preferential access into each others' markets, and to mitigate the negative impacts of Brexit on our bilateral relationship, Canada and the U.K. have negotiated a Trade Continuity Agreement based on CETA, with a commitment to subsequent negotiation of a new FTA that would best reflect the Canada-U.K. bilateral relationship and inform Canada's view on possible U.K. accession to the CPTPP.

On November 17, 2020, agreement was reached on all outstanding issues in the Canada-U.K. Trade Continuity Agreement negotiations. Once the text is finalized, it will undergo jurilingual review and translation. These steps are done in concert with the U.K. and are therefore subject to possible delays outside of Canada's control. Domestic implementing legislation will be drafted to complete the package for cabinet consideration. Following cabinet approval, a formal signing would take place before the bill is tabled in Parliament. The implementing legislation will need to be passed into law before the Agreement can be ratified and implemented. In the interests of minimizing any disruption for Canadian business, the government will move as quickly as possible to initiate the ratification process as soon as the Agreement is signed.

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