Canada's Objectives for Negotiations for a Canada-United Kingdom Free Trade Agreement

On December 13, 2021, the Government of Canada submitted to Parliament its notice of intent to enter into negotiations toward a new, comprehensive Canada-United Kingdom Free Trade Agreement (FTA), in accordance with the Policy on Tabling of Treaties in Parliament.

In negotiating an FTA with the United Kingdom, the government’s objective will be to create meaningful benefits for Canadian business, workers and families. Through an FTA, the government will seek to provide Canadians with increased preferential access to the United Kingdom, benefiting Canadian exporters of both goods and services. The government will seek to ensure that the benefits and opportunities of trade with the United Kingdom are widely shared, including with traditionally underrepresented groups, such as women and women-owned businesses, Indigenous peoples, and small and medium-sized enterprises (SMEs).

In addition to seeking improved preferential access, Canada will seek to conclude a modern, ambitious and inclusive trade agreement, reflecting the latest approaches, including in areas such as digital trade, trade and gender, climate, environment and labour. In addition, the government will seek to ensure that the FTA does not prevent the federal government from acting to fulfil Canada’s legal obligations to Indigenous peoples, including rights as recognized and affirmed by Section 35 of the Constitution Act, 1982, and those rights set out in self-government agreements. The government will seek to preserve flexibility to adopt and maintain measures related to Canada’s cultural sector. The government will also fully defend Canada’s supply management system for dairy, poultry and eggs, including by not conceding any additional market access for supply-managed goods.

In pursuing a Canada-United Kingdom FTA, the government will continue to be guided by feedback obtained from Canadians during public consultations. This includes feedback received during public consultation on priorities for trade negotiations with the United Kingdom in spring 2021, as well as through ongoing engagement with a broad range of stakeholders to be conducted throughout the negotiating process. The government will also be guided by the findings of the Environmental Assessment and the Gender-Based Analysis Plus of the proposed FTA.

The government is fully committed to a high level of transparency throughout the negotiation of a Canada-United Kingdom FTA. In this spirit, the government has agreed to publish a summary of its specific negotiating objectives for the negotiation of new comprehensive trade agreements.

In line with the considerations listed above, Canada will seek to negotiate an FTA that:

Trade in goods

National Treatment and Market Access for Goods

• Preserves Canada’s preferential market access currently provided under the Canada‑United Kingdom Trade Continuity Agreement, and seeks to obtain additional commercially meaningful market access for certain sectors.
• At a minimum, reaffirms key international market access commitments, and includes provisions and mechanisms to prevent and address non-tariff barriers.
• Fully defends Canada’s supply management system for dairy, poultry and eggs, including by not conceding any additional market access in these sectors.

Rules of Origin and Origin Procedures

• Includes rules of origin and product-specific rules that allow for cumulation of materials and production. Canada will seek to establish criteria for determining the origin of goods that are clear, as simple as possible, minimize the opportunity for administrative discretion, and take into account regional integration and existing production patterns.
• Sets out the procedures to be used by the customs administrations both to administer the rules of origin and to enable the trade community to take advantage of the preferential tariff treatment afforded under an FTA.
• These procedures will support the evolving trade environment and allow certification of origin by the exporter with verifications performed on a risk-managed basis after the good is imported.

Customs and Trade Facilitation

• Affirms and builds upon the WTO Agreement on Trade Facilitation. This will include seeking provisions that promote a transparent, predictable and consistent border environment that facilitates legitimate trade in goods, while safeguarding Canada’s ability to protect its borders and to provide certainty around Canada’s ability to administer or introduce new measures that ensure or enhance trader compliance with Canada’s laws, regulations or procedural requirements relating to the importation, exportation or transit of goods. Such measures include those that seek to ensure the safety and security of Canada and its citizens through the proper reporting and accounting declaration of goods and payment of duties, taxes, fees and charges by traders.

Trade Remedies

• Reaffirms the rights and obligations of parties under the WTO agreements in respect of global safeguard, anti-dumping and countervailing measures.

Sanitary and Phytosanitary Measures

• Affirms and builds on the WTO Sanitary and Phytosanitary (SPS) Agreement and the Canada-United Kingdom Trade Continuity Agreement to enhance cooperation and further strengthen bilateral trade through science-based measures, while preserving each party’s right to take measures necessary for the protection of human, animal or plant life or health.
• Establishes mechanisms to prevent or address unjustified SPS measures, including the formation of an SPS Committee.

Technical Barriers to Trade

• Incorporates and builds on the key commitments of the WTO Agreement on Technical Barriers to Trade and sets out provisions that prevent and address disruptions created by regulations and associated testing or certification requirements.
• Promotes regulatory transparency and predictability while preserving each party’s right to regulate in the public interest to achieve legitimate public policy objectives.

Investment and trade in services

Investment

• Includes rules regarding the promotion and protection of investment and investors subject to a negative list of reservations.

Cross-Border Trade in Services

• Builds on the outcome of the Trade Continuity Agreement and sets out comprehensive rules, including consideration of sector-specific provisions to facilitate trade in sectors such as professional services. Canada will seek a negative list of reservations to secure market access, address barriers, and substantially improve predictability, certainty and transparency with respect to trade in services.

Development and Administration of Measures (Domestic Regulation)

• Builds on the Trade Continuity Agreement and the recently concluded WTO Joint Statement Initiative on Services Domestic Regulation and sets out disciplines on measures related to an authorization to supply a service. Enhanced rules on the development and administration of measures have the potential to facilitate increased trade in services and level the playing field for Canadian businesses.

Financial Services

• Includes a stand-alone chapter for trade in financial services that reflects the specialized and highly regulated nature of the sector, including specific trade and investment protection commitments that provide a level playing field for financial institutions, and a robust prudential carve-out that ensures financial sector regulators can take measures to preserve the safety and soundness of the financial system.

Temporary Entry for Business Purposes

• Includes reciprocal commitments to enhance transparency and to facilitate the temporary movement of certain types of business persons in support of bilateral trade in goods, services and investment.

Telecommunications

• Maintains a competitive telecommunications marketplace through transparent and effective regulations.

Other areas

Digital Trade (Electronic Commerce)

• Facilitates inclusive economic growth and trade opportunities through the use of the Internet and address potential barriers to digital trade.

Government Procurement

• Incorporates and builds upon the procedural rules of the WTO Agreement on Government Procurement and includes meaningful market access commitments on the basis of reciprocity.

Intellectual Property

• Maintains and builds upon existing international standards under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights and multilateral Intellectual Property (IP) treaties administered by the World Intellectual Property Organization, as well as existing bilateral IP commitments between Canada and the United Kingdom.
• Provides a transparent, fair and predictable IP framework for businesses operating in Canadian and United Kingdom markets.
• Balances the interests of relevant stakeholders, including rights holders, users, online intermediaries and the public, and considers broader public policy objectives.
• Promotes collaboration and leadership in emerging IP-related topics of mutual interest, such as IP in the digital environment, and facilitates cooperation in areas including IP education and awareness.

Competition Policy

• Includes a competition policy chapter that aims to promote competitive markets. It also aims to make sure that the benefits of free trade are not offset by anti‑competitive activities, misleading representations or deceptive marketing practices.

State-Owned Enterprises and Designated Monopolies

• Ensures that large commercial state-owned enterprises (SOEs) and designated monopolies operate in accordance with market principles, while recognizing the role of SOEs in the public domain.

Labour

• Includes comprehensive and enforceable labour commitments to help ensure that trade and investment do not come at the expense of workers’ protections. Canada recognizes that promoting fundamental labour rights supports equitable growth and stability.

Environment

• Includes comprehensive and enforceable environment commitments to help ensure that environmental protection is upheld as trade and investment is liberalized and to promote the mutual supportiveness of trade and environment. Canada recognizes that the promotion of trade and the protection of the environment are interconnected and mutually beneficial goals.

Science, Technology and Innovation

• Includes disciplines to facilitate cooperation, trade, and investment in areas related to commercial science, technology and innovation activities.

Transparency and Anti-Corruption

• Facilitates a transparent and predictable environment for trade and investment by promoting transparency and anti-corruption.

Responsible Business Conduct

• Includes dedicated provisions to encourage enterprises to uptake and implement Responsible Business Conduct (RBC) in their business practices informed by and complementary to existing global RBC standards such as the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights.

Regulatory Cooperation and Good Regulatory Practices

• Supports the development of predictable and evidence-based regulations by encouraging widely accepted good regulatory practices in Canada and the United Kingdom.
• Creates a regulatory cooperation forum as the mechanism through which Canada and the United Kingdom undertake the cooperation activities provided in the chapter.

Trade and Gender

• Includes dedicated provisions on trade and gender that will seek to address the specific interests, needs and unique challenges that women and other underrepresented groups face when participating in international trade and investment, and to ensure that they have access to the benefits and opportunities that may flow from bilateral trade and investment relations between Canada and the United Kingdom.

Trade and Indigenous Peoples

• Includes dedicated provisions on trade and Indigenous peoples that will seek to address the specific interests, needs and unique challenges that Indigenous peoples face when participating in international trade and investment, and to ensure that Indigenous peoples have access to the benefits and opportunities that may flow from bilateral trade and investment relations between Canada and the United Kingdom.

Small and Medium-Sized Enterprises

• Includes dedicated provisions on SMEs that recognize their contribution to economic prosperity, address the specific interests, needs and unique challenges that SMEs face when participating in international trade and investment, and ensure that SMEs are able to utilize and benefit from the opportunities that may flow from bilateral trade and investment relations between Canada and the United Kingdom.

Administrative

Dispute Settlement

• Provides for fair, transparent, efficient and effective means of resolving disputes relating to the agreement that arise between the Parties, including consultations and compulsory and binding dispute settlement.

Institutional and General Exceptions

• Includes detailed provisions relating to the implementation and ongoing functionality of the agreement, including the creation of an institutional body to oversee implementation and general exceptions. Exceptions will ensure that the parties retain the right to regulate in the public interest, including for a party’s essential security interest and other public welfare reasons.