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Will there be duty-relief after Brexit?

The United Kingdom is set to leave the European Union at the stroke of midnight December 31, 2020. This also marks the end of the Comprehensive Economic and Trade Agreement (CETA) between Canada and the UK.

The United Kingdom is Canada’s fifth largest trading partner with trade totaling $29 billion in 2019.UK_Canada_143453129_s

Does Brexit mean extra duty for Canadian importers?

Good news! On November 21, 2020 Canada and the United Kingdom successfully concluded talks for an interim deal—the Canada-United Kingdom Trade Continuity Agreement (Canada-UK TCA)—while the two governments work towards negotiating a new comprehensive free trade agreement.

What the Canada-UK TCA means for importers

According to Global Affairs Canada this new interim agreement will provide continued access to the benefits of CETA, including the tariff elimination on 98% of Canadian products exported to the United Kingdom.

While the announcement confirms the continuity of the benefits previously offered for eligible goods under CETA, we are waiting for details directly from the Canadian Government confirming exactly how this will be rolled out and what will be required in the form of certification.

According to the Trade Commissioner’s site, if the Commons can’t rectify the interim agreement in time, Canada-UK bilateral trade would shift from CETA preferences to World Trade Organization (WTO) rules, including most-favoured nation (MFN) tariffs on goods, until the Canada-UK Trade Continuity Agreement comes into force.

Preparing for the transition

At this time, Cole’s Free Trade Department recommends that importers advise customers and/or vendors in the UK that:

  • You are aware of this new agreement
  • A new free trade origin declaration will likely be required, and
  • You will provide them with more information before the New Year.

In the meantime, keep an eye on this space and more communication from Cole on this important transition.

Our experts are ready to help you navigate the changing waters of Free Trade Agreements and international trade. Contact our team today.

Information provided by: Free Trade Dept. - Cole International

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