Minister of International Trade Mary Ng watches pre-recorded footage from an earlier video conference that she participated in with Prime Minister Justin Trudeau, British Prime Minister Boris Johnson and International Trade Secretary Liz Truss, during a news conference on the Canada-United Kingdom Trade Continuity Agreement in Ottawa, on Nov. 21, 2020.Justin Tang/The Canadian Press
After centuries of subservience to the British Crown, Canada is entering post-Brexit trade negotiations with the United Kingdom from a rare position of strength.
Last month, Canada and the U.K. signed a rollover trade agreement to extend existing rules beyond Dec. 31, when Britain will officially separate from the European Union. Next year, when formal negotiations are set to begin on a new, bilateral trade deal, is when experts say Westminster won’t be in a position to refuse Canada’s demands.
“This is way more important to the British than it is to us,” says Mel Cappe, who served as the Canadian high commissioner to the U.K. from 2002 to 2006. “There are domestic politics within the U.K. that all drive you to say they need us more than we need them, that they need this deal.”
The U.K. is “disuniting,” Mr. Cappe says, referring to examples such as the Scottish independence movement. He says the British government needs a post-Brexit trade deal done quickly to convince the U.K.’s members — Scotland, Wales and Northern Ireland — that they’re stronger together.
“It’s also really valuable to the British not just because of Canada, but because it demonstrates to everybody else around the world that there is a deal to be had and that they need to make a deal as well,” Mr. Cappe says.
Grace Skogstad, a professor at the University of Toronto’s Scarborough campus, agrees that the onus is on the U.K. to make the deal happen.
“They need to demonstrate that they can get these bespoke agreements as they call them done,” says Dr. Skogstad, whose specialties include trade policy. “We will be able to play hardball and be tough negotiators and make sure that we have limited concessions. And, to the extent that there are still barriers to us getting access to the U.K. market, I think we will be able to push hard against those.”
Among the demands Canadian negotiators could make include increased access for Canadian dairy products in the British market and limits on the level of access British financial service providers get to Canada’s market.
Dr. Skogstad believes the more interesting question is whether the two sides can get anything negotiated. Aside from negotiating the terms of Brexit, she says the U.K. hasn’t directly struck a trade deal on its own since joining the precursor to the EU in the 1970s. It’s going to be “a big challenge for the U.K. to get its expertise up on this,” she says.
During the Brexit campaign, Mr. Cappe says the “leave” side explicitly promised to quickly and efficiently strike a series of new, bilateral trade agreements once the process of leaving the EU was complete. Canada was often touted as the country likely to be the first to sign such a deal.
“The notion that the Brits are open for business and that the Canadians have cut a deal with them tells the African countries that they should be cutting deals too and so should South American countries and so should Asian countries and so on,” Mr. Cappe says.
Still, any goal of getting a deal done quickly could be at odds with the mindset of Crawford Falconer, chief trade negotiation adviser for the British government, says Mark Warner, who practices trade law in Canada and the United States. He worked directly with Mr. Falconer when they were both at the Organization for Economic Co-operation and Development in the late 1990s and says he’s “a big believer in there being no advantage to racing to get things done.”
Adds Mr. Warner: “He’s going to look at the Canadian demands and he’s not going to be roiled by that. He is going to take his time and say ‘it will get done when it gets done.’ ”
Mr. Warner also questions whether the British government will be willing to make major concessions in exchange for getting a deal done more quickly.
“What I can sense is that Canada is going to be negotiating very hard with the British; we aren’t going to be very friendly,” Mr. Warner says. “I think the British are a little bit disappointed in that and they are not able to roll over and play dead for Canada, because if they do, what happens when they turn around and do an agreement with the United States?”
Mr. Cappe believes that the issue “cuts both ways.”
“We, Canada, don’t want to have the first deal with the United Kingdom if they’re going to be softer on the next country,” he says, adding any deal will likely have a clause similar to the “most favoured nation” clause in the Canada-EU Comprehensive Economic and Trade Agreement. “That says, ‘if you give a better deal to the Aussies [Australians] or to the Kiwis [New Zealanders] or to anyone else, that you have to offer it to us as well,’” Mr. Cappe adds.
Regardless of how long it takes to get a deal done, experts are confident Canada will get what it wants.
“[The British] are going to be policy takers, I don’t think they’re really going to be policy makers that much,” Dr. Skogstad says. “I don’t think the U.K. is going to be at any time in the driver’s seat. I think it is going to have to settle for what it can settle for.”