Last week, I noted that SA had struck a deal that wasn’t with the UK, agreeing to rollover trade terms in the event of a no-deal Brexit. At the time, I pointed out that this was by no means a trade coup for us, since it just means we can keep trading on the same terms as we are trading right now. There’s no upside.
Canada, it seems, is a little smarter than us. The UK has been working overtime for months to get Canada to rollover its existing deal with the EU to the post-Brexit UK. The EU and Canada have a famously comprehensive trade deal that is among the most in-depth in the world (other than that between the members of the EU and the deal formerly known as NAFTA).
But reports have emerged that Canada has declined to sign on the dotted line. Canny Canada has seen that UK ministers are promising to cut tariffs on the bulk of their imports to zero in the event of a no-deal Brexit, in a bid to keep costs down for consumers. Canada has realised that if the UK crashes out with no deal and eliminates most of its tariffs, Canadian firms will enjoy tariff-free access to UK markets without giving UK firms preferential access to Canadian markets. Thus, Canada seems to be planning to wait and see what happens. If the UK crashes out, it’s planned zero tariffs means there’s no incentive for Canada to do a deal. We should have thought of that.
