UK struggling to conclude Canada trade deal, says Trudeau

Justin Trudeau, Canada’s prime minister, has claimed that Britain is struggling to conclude a trade deal with his country before the Brexit transition ends on January 1 because it does not have “the bandwidth”.

Mr Trudeau said Canada was highly experienced at striking trade deals and was ready to conclude an agreement with the UK, rolling over the terms of the existing EU-Canada deal when the transition period ends.

“The UK hasn’t had to negotiate trade deals in the past few decades,” Mr Trudeau told the Financial Times. “So there is an issue of not really having the bandwidth within government to move forward on this.”

Liz Truss, Britain’s international trade secretary, denies that Britain does not have enough capacity or trade negotiators to do a deal, and her allies say she hopes to get an agreement across the line by January 1.

“We’re firing on all cylinders,” said one aide. “We’ve got more than 700 staff in our trade policy group, which is considerably more than the Office of the US Trade Representative.”

Britain currently trades with Canada under the terms of the EU-Canada comprehensive economic and trade agreement signed by Mr Trudeau in 2016, which removed most tariffs on trade.

Unless the Ceta terms are rolled over, trade between Britain and Canada will revert to “lowest common denominator” World Trade Organization terms, with new tariffs and barriers to trade, on January 1.

Britain is Canada’s fifth biggest trading partner after the US, China, Mexico and Japan, with over US$20bn of bilateral trade in 2017. Securing a deal before January 1 is important for both countries.

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Mr Trudeau told the FT Global Boardroom conference on Wednesday that the two countries were “on the edge of having an agreement” but said that “one of the challenges is bandwidth”.

He said Canada had a free trade deal with every other G7 country, along with a free trade deal in North America and treaties with countries around the Pacific Rim. “We know how to negotiate trade deals,” he said.

Mr Trudeau said he offered some of his country’s expertise to Britain, which had not had to negotiate any trade deals since it became a member of the EU in 1973 because Brussels ran commercial policy.

“I know that rolling over and demonstrating free trade deals for the UK government is extremely important,” he said.

“Canada’s a really easy one. We’re there for it. We’d like to do it. So I’m very hopeful that it’s going to get done but that really is up to the UK government because we’re there for it.”

Ms Truss recently concluded a trade deal with Japan and has rolled over all but about a dozen EU trade agreements: Canada is the biggest outstanding one, along with Mexico, Vietnam and Egypt.

“The core elements of the deal are agreed, there’s just a few things to iron out,” said an aide to Ms Truss. “We’ve made some very reasonable offers to the Canadians.

“The ball is in their court probably more than it is in ours. A deal is there to be done. Bandwidth isn’t an issue at all.”

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Separately Britain is seeking a “Canada-style” free trade agreement with the EU, similar to the one agreed between Brussels and Ottawa. Talks are this week continuing in London but are expected to run into next week.


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