Most Favoured Nation: Blame Canada, Again?

CPTPP, Critical Minerals and the TRA

Welcome to the 86th edition of Most Favoured Nation. The full post is for paid subscribers only, but you can sign up for a free trial below.

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Cast your mind back to early 2019. The UK, while still trying to pretend that exiting the EU without a deal was something it might actually do, released the so-called no-deal tariff schedule.

This proposal stated that in the event the UK exited the EU without a deal, it would unilaterally scrap or lower a load of tariffs. Free traders of the world rejoice! Anyhow, this announcement immediately created problems.

Well, a problem: Canada.

At the time, the UK and Canada were close to finalising the negotiations to replicate the EU-Canada FTA (CETA). But the Canadians looked at the no-deal tariff schedule and responded by saying something along the likes of: “Why do we need to do a trade deal with you when you’re about to give us, and the rest of the world, pretty much all the market access we want for free!”

The negotiations were then called off. The UK was furious. Canada was furious. CANZUK fans were furious (probably …).

In the end, the UK and Canada only agreed to roll over CETA very late in the day, following a change in trade minister in both the UK and Canada.

All of this is to say that while you might imagine the UK and Canada are buddies, in a trade context, there is quite a lot of recent bad blood.

This brings me to my point: The Canadians are [allegedy] at it again.