Frontier Supply Chain Solutions

What the new Canada UK trade deal means for Canadian businesses 

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February 2, 2021

Overview of the Canada UK trade deal

The trade agreement between Canada and the EU, CETA (Comprehensive Economic and Trade agreement) was renegotiated and came into effect December 31st, 2020. CETA no longer includes the UK due the nation’s decision to leave the EU (Brexit). Brexit, which came into effect January, 1st, 2021, resulted in the construct of a new trade agreement between the UK and Canada. This deal, the “Canada-United Kingdom Trade Continuity Agreement” (Canada-UK TCA) was due to take effect when Brexit did. Though not officially signed, the two nations have a Trade Memorandum of Understanding. During this transition period however, any trades between Canada and the UK will follow the guidelines under CETA. 

The government of Canada suggests for companies to consider seeking legal advice. For example, contacting a customs broker, freight forwarder or logistics provider to help to navigate the situation.

Goals for the Canada UK trade deal:

The primary goal for this deal is for both nations to work together to promote economic recovery following the damages that occurred due to the Covid-19 pandemic. That is, providing a more predictable trade environment that creates stability for businesses of all sizes while ensuring job security for the employees.  

To achieve these goals, the Canada UK trade deal will focus on preserving the main benefits that CETA brought to each economy while building and strengthening other areas. These areas of primary focus include: the environment, women’s economic empowerment, and digital trade. Due to the similar ideals the two nations share, it is hopeful that the changes made to the deal will help develop mutually beneficial results and mitigate further damages to both economies.

Opportunities the new trade deal brings for Canadian companies :

One of the most notable changes to this new deal is the elimination of tariffs on 98% of traded goods. This elimination provides Canadian exporters with preferential access to the UK market because now, 98% of Canadian exports will no longer have tariffs attached to them. Additionally, these changes promote an avenue for Canadian companies who wish to export into the UK. Canadian exporters will experience lower associated costs and avoid the other obstacles involved with international trade.

The UK is one of Canada’s top trading partners. In 2019, the UK imported $14.9 billion worth of goods into Canada. Additionally, Canadian exports to the UK accounted for 3.3% of Canada’s total exports. E Commerce and door-to-door delivery is becoming increasingly popular in both Canada and the UK. One of the primary focuses for the new deal is to promote digital trade between the two nations. Canadian companies have the opportunity to successfully expand into the UK market by maintaining strong trade relationships in addition to sharing a collective goal. 

Helping Canadian companies trade with the UK:

Frontier has various operations throughout Canada and the U.S. that work together to help facilitate trade between the UK and Canada. These operations include logistics, customs brokers and freight forwarding services. If expanding your business to reach UK consumers interests your company, Frontier can help. We can provide you with all the necessary services to guide you through the process.

With our freight forwarding network and UK partners, Frontier can ensure parcels are delivered efficiently to the UK in a safe and cost – effective manner.  Our UK partner customs brokers ensure proper tariff classifications are used and also calculated properly.  This collection of services throughout, help Canadian businesses gain access to the UK market.

If importing from the UK, Frontier can assist with vendor consolidation in the UK, forwarding and customs brokerage to you in Canada.

Click below to read the full document outlining the trade agreement between Canada and the UK: