Canada-UK Trade Continuity Agreement explained

• The Canada-UK Trade Continuity Agreement (Canada-UK TCA) replicates the main benefits of the Canada-EU Comprehensive Economic Trade Agreement (CETA) to ensure continuity in Canada’s trade with the UK following the UK’s departure from the EU.
• The Canada-UK TCA provides Canadian businesses, exporters and investors with continued preferential access to the UK market while upholding all of CETA’s high standards for consumers, workers and the environment.
• The Canada-UK TCA will be in place until a new comprehensive Canada-UK free trade agreement can enter into force.

What the Trade Continuity Agreement means for businesses

Continued opportunities for goods exporters: The Canada-UK TCA provides Canadian exporters with continued preferential access to the UK market and includes the elimination of 98% of tariffs on Canadian exports to the UK (carried over from CETA) on entry into force, and the elimination of an additional 1% of tariffs on Canadian exports to the UK by January 1, 2024, when the TCA is fully implemented—which will bring the elimination of tariffs on Canadian exports to 99%.

• Canadian exports subject to Tariff Rate Quotas and Origin Quotas^{Footnote 1} will continue to have commercially meaningful market access to the UK market.
• The Canada-UK TCA fully protects Canada’s dairy, poultry and egg industries, and provides no new incremental market access for cheese or any other supply-managed products.
• Canada and the UK have agreed to ensure that their respective customs procedures remain simple, effective, clear and predictable to reduce processing times at the border and keep trading costs as low as possible.
• The Canada-UK TCA replicates CETA’s high standards related to sanitary and phytosanitary measures, technical barriers to trade, and to regulatory cooperation, and confirms each government’s right to regulate in the public interest.

Continued opportunities for exporters of services: The Canada-UK TCA ensures continued access to the UK market for Canadian services companies under some of the best terms the UK has ever granted a trading partner. 

• The financial services provisions of the Canada-UK TCA help protect investments and lock in liberalization of the financial sector.
• CETA commitments for temporary entry of business people are carried forward in the TCA, and will help support two-way trade. 
• The Agreement provides Canadian contractors with preferential access to the UK  market.

Continued balanced approach to investment protection: The Canada-UK TCA provides important investor protections, while preserving the Government of Canada’s right to regulate in the public interest.

• Investment protections help to attract foreign investment and provide Canadians with more opportunities to invest abroad with confidence.
• The Canada-UK TCA’s investment dispute-resolution provisions will not apply until reviewed by both countries. If no agreement is reached within three years, and unless both countries agree to extend this deadline, the proposed provisions for a CETA-like investment tribunal and appellate tribunal will apply.

Continued access to UK government-procurement market: The Canada-UK TCA guarantees Canadian suppliers access to procurement opportunities with the UK government, estimated to be worth approximately Can$118 billion.

• As in CETA, Canada and the UK have agreed to treat each other’s goods and suppliers in a non-discriminatory, fair and transparent manner for identified procurements of goods and services above specified thresholds.

Continued high standards: The Canada-UK TCA upholds and replicates CETA’s high standards related to labour, the environment and dispute settlement.

• The Canada-UK TCA also replicates CETA’s joint interpretive instrument, with the intention of advancing work on labour, the environment and other issues.
• Canada will continue to work with the UK to maintain strong and stable trading relationships that grow our economies and benefit our people, while protecting the environment.

Commitment to subsequent negotiations: Canada and the UK have agreed to enter into subsequent negotiations within a year of the Canada-UK TCA’s entry into force, with the goal of reaching, within three years, a new bilateral free trade agreement that best reflects the bilateral relationship and interests at the time.

Canada launched public consultations on trade negotiations with the UK March 12, 2021, to seek the views of Canadians on future trade relations with the U.K.