New U.K. Tariff List Ramps Up Urgency of Canada-U.K. Trade Talks
May 25, 2020
The United Kingdom has revised its global tariff strategy, laying out for Canada and other trading partners the rates that will apply to their exports as of Jan. 1, 2021 — and in the process, setting out Britain’s starting position for future bilateral trade talks.
The new list published Tuesday replaces a temporary regime announced a year ago that would have cut tariffs on nearly all (an estimated 95 per cent) of what the U.K. imports — a hastily-developed scheme designed to the cushion the blow to British consumers of a sudden no-deal Brexit that, in March of 2019, appeared possible.
Under the new regime, Most Favoured Nation (MFN) tariff rates higher than zero will apply to about half of the products imported by the U.K. from around the world, or about 60 per cent of the value of its global trade, once it completes its transition out of the European Union trading bloc. The U.K. continues to negotiate the final terms of this exit.
Many trading partners, Canada included, want clarity on exactly how future trade between the EU and its former member will work before proceeding with their own bilateral talks with the U.K. Canada has had preferential trading terms with the U.K., its third-biggest export market, under its Comprehensive Economic and Trade Agreement (CETA) with the EU.
The CETA will continue to apply until the end of this year, but beyond that, the terms of Canada–U.K. trade are uncertain.