U.K. and Canada Can Avoid New Tariffs Post-Brexit, Envoy Says

(Bloomberg) -- The U.K.’s top envoy to Canada says she’s confident the two countries can avoid new tariffs after Brexit scuttles their existing trade agreement.

Susan le Jeune d’Allegeershecque, the U.K. High Commissioner to Canada, said officials from both nations have held informal talks about preserving the arrangement currently enshrined under the Canada-European Union trade pact. They hope to strike a deal to preserve ties -- either through a stopgap fix or by negotiating a comprehensive bilateral deal -- once the U.K. leaves the EU next month.

“Even if it’s a hard Brexit, I am pretty confident that between now and then, we will have something which would mean that tariffs would be avoided,” le Jeune d’Allegeershecque said in a Jan. 23 interview in Ottawa. “We are acutely aware of the need not to drop off a cliff edge on the 29th of March.”

The nations have two options, depending on the Brexit outcome. A deal between the U.K. and the EU would buy time, keeping the Canada-EU Comprehensive Economic and Trade Agreement in effect and giving the U.K. and Canada 20 months to hash out their own version of CETA. A no-deal Brexit raises the threat of a more jarring end to CETA’s effect in the U.K., but le Jeune d’Allegeershecque is confident there would be a seamless transition “very similar” to CETA and new tariff barriers won’t suddenly spring up.

The U.K. is adding staff in Canada to help build ties and calm nerves around Brexit, said le Jeune d’Allegeershecque, who was appointed high commissioner -- a title used between Commonwealth nations, akin to an ambassador -- in 2017. She and her staff have traveled to Toronto, Montreal, Calgary and Vancouver for talks with trade associations to ease fears and push for continued trade and investment ties.

She rejected a suggestion the U.K. might become more inward-looking in a Brexit era. “We are, if anything, opening up to new trade opportunities,” the envoy said. “One of the things we have done and will continue to do is invest a little more in some of the relationships that I think have been taken for granted. Canada is one of those."

Canadian Trade Minister Jim Carr acknowledged the two sides have had informal talks, but said his government is waiting to see how Brexit plays out. “We want to ensure that Canada continues to have a very healthy trading relationship with both the EU and the U.K.,” he said last month. “Meanwhile, we’ll have continuing discussions both at the official level and at the political level with the U.K. to make sure everybody understands where everybody else is coming from.”

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