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UK and Canada Announce Transitional Trade Agreement

The United Kingdom and Canada have reached a rollover trade agreement that allows trade between the two countries to continue under the provisions of the Comprehensive Economic and Trade Agreement (CETA), which currently governs trade between the European Union and Canada. Plans were also announced to begin negotiations next year on new UK-Canada trade agreement.

More details are available in press releases from the UK Department for International Trade and Global Affairs Canada. The UK release specifically notes that UK beef will continue to enter Canada at zero duty. Through September, Canada’s imports of UK beef increased 157% from a year ago to 3,718 mt, and the UK is now the largest European supplier of beef to Canada. In contrast, Canada’s beef exports to the UK increased just 2% to 1,048 mt.

It is not yet clear how market access was handled in this transitional agreement. CETA included duty-free quotas for Canadian beef exports to the EU, with 2021 volumes set at 19,770 mt for chilled beef and 9,615 mt for frozen (as converted to product weight). CETA also eliminated the duty on Canadian beef entering the EU under the shared, 11,500 mt U.S.-Canada WTO Hilton quota, under which a 20% in-quota duty still applies to U.S. beef. The U.S.-Canada Hilton quota is being apportioned or split between the UK and the EU, and those negotiations are ongoing. Canada also has duty-free access to the EU through its share of the High Quality Beef Quota, which is 3,200 mt.

CETA also established duty-free quotas for Canadian pork exports to the EU, with a 2021 volume of just over 52,000 mt (as converted to product weight). Canada also has a country-specific WTO pork TRQ for exports to the EU of 4,624 mt, with duties on imports within this quota also eliminated through CETA. That TRQ is also subject to apportioning between the EU and the UK, and is under negotiation. Canada’s January-September imports of pork from the UK increased 136% from a year ago to 878 mt, while Canada reported no pork exports to the UK.