UK says rules of origin deal with Canada probably won't be extended

Britain said on Wednesday (Mar 27) that post-Brexit trade arrangements with Canada over rules of origin were likely to expire next week, blaming Ottawa for the latest impasse that leaves carmakers facing the risk of higher tariffs from April.

Britain and Canada paused talks over a new free trade agreement in January amid disagreement on Rules of Origin (ROO) arrangements, due to expire at the end of March, as well as mutual unhappiness about a lack of access to agricultural markets.

Under a trade continuity deal struck with Canada when Britain left the European Union, both sides agreed that inputs from, or processed, in the EU should count as made in the UK and as such qualify for lower tariffs in Canada.

But on Wednesday, Britain blamed Canada for not rolling over the arrangements, potentially leaving carmakers that don’t meet the new ROO requirements facing a tariff of 6.1 per cent in Canada.

“Canada’s decision not to roll over these rules of origin will increase the cost of trade and hurt businesses on both sides of the Atlantic,” a spokesperson for Britain’s Department for Business and Trade said.

“The UK government remains ready to work with Canada to find a solution that works for both countries, but we won’t accept rowing back on the current terms.”

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British auto exports to Canada were worth almost US$883.68 million in 2023. REUTERS