Canada Could Issue Order to Avoid Tariffs on U.K. Products

(Bloomberg) -- Justin Trudeau’s government expects to take stopgap regulatory measures to prevent the imposition of tariffs on U.K. products as it waits for Canada’s parliament to ratify a new trade pact between the countries, according to a senior government official.

Britain and Canada announced a transitional trade agreement in November to cover more than C$29 billion ($22.7 billion) worth of bilateral trade. The accord would adopt the same terms as the EU-Canada free trade agreement, however Canadian lawmakers rose for holiday recess on Friday before the proposed deal could be passed.

The most likely option available to Canada’s government is a so-called remission order, said the Canadian official, who isn’t authorized to speak publicly about the plans and asked to remain anonymous. That would allow Canada to exempt from tariffs any goods or services that are set to trade duty free under the new agreement.

The U.K. government said Thursday it was concerned that if its post-Brexit agreement with Canada couldn’t be finalized before the year end, exports from both countries would be forced to trade under rules set out by the World Trade Organization. Without the new accord, the U.K. and Canada would face tariffs on trade from Jan. 1, when the Brexit transition period ends.

Canadian Trade Minister Mary Ng introduced the bill in the legislature on Wednesday, leaving just two days for parliamentarians to debate the matter.

“We have been actively working to ensure that there is a smooth transition, and that Canadian businesses don’t experience any disruptions,” Youmy Han, spokesperson for Ng, said by email.

The House of Commons resumes sitting on Jan. 25.

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