The European Union and Canada will begin cutting import duties from Thursday on thousands of products and services in a reminder to Britain of the work it will take to replace the trade alliances it will give up when it leaves the EU.
The Comprehensive Economic and Trade Agreement (CETA) will provisionally enter force on Thursday, eight years after negotiations begun. It will be the EU’s first major trade deal since it began implementing its South Korea agreement in 2011.
The Canada agreement is the EU’s first trade pact with a G7 country, marking a success after its credibility took a beating from Britain’s 2016 vote to leave the block.
It has since struck a deal with Japan and hopes for further agreements with Mexico and the Mercosur countries of South America by the end of this year.
May, Trudeau agree
British Conservatives in the European Parliament said on Wednesday that the EU-Canada deal would bring 1.3 billion pounds ($1.76 billion) in benefits to Britain and said they hoped CETA’s benefits for Britain would continue after Brexit.
“I believe CETA will become the gold standard of agreements and one we can tailor to suit the priorities of the British and Canadian economies post-Brexit,” lawmaker Emma McClarkin said in a statement.
British Prime Minister Theresa May said in Ottawa on Monday that she and Canada’s Justin Trudeau had agreed that CETA should be “swiftly transitioned” into a new U.K.-Canada deal after Brexit.
How fast that transition occurs will depend on how much post-Brexit Britain wants to tailor the deal, perhaps by including closer convergence on financial services, rather than largely copying what is in place.
Duties, quotas to change
CETA will abolish some 98 percent of customs duties, open up public tenders to companies and allow the EU to export more cheese and wine and Canada more pork and beef in quotas that expand over the next six years.
The 1,598-page CETA text is full of negotiated details, including the right of European companies to ship up to 537,000 knitted jerseys to Canada and Canadian companies’ ability to send up to 196,000 square meters of carpet to Europe.
Britain and Canada will still have to create their own free trade agreement, which took five years to negotiate.