British Prime Minister Boris Johnson answers questions during a media conference at an EU summit in Brussels, Thursday, Oct. 17, 2019. Britain and the European Union reached a new tentative Brexit deal on Thursday, hoping to finally escape the acrimony, divisions and frustration of their three-year divorce battle. (AP Photo/Francisco Seco)

Canadian business needs Brexit certainty but Johnson plan only a start: observers

The outcome of the unusual weekend vote in London is itself far from predictable

Experts warn that a post-Brexit United Kingdom will present Canadian business with tremendous uncertainty about billions of dollars worth of trade and investments, no matter how the British Parliament votes on Saturday.

The outcome of the unusual weekend vote in London is itself far from predictable, as British Prime Minister Boris Johnson struggles to get support for a controversial agreement that he reached Thursday with the European Union.

But observers say even a Johnson success would only provide a starting point for further rounds of difficult negotiations between London and Brussels and eventually between Canada and the United Kingdom.

Fasken partner Clifford Sosnow says the primary benefit of Johnson’s plan is that it would provide for 14 months to 36 months of negotiations on a new trade deal for two of Canada’s biggest export and investment markets.

“The major concern for everybody is the instability and the instability from not knowing what the business relationship will be, what the investment relationship will be,” says Sosnow, who provides strategic advice about international trade and investments at one of Canada’s largest business law firms.

He adds that open talks between the United Kingdom and Canada would be allowed only after the U.K. leaves the European Union on Oct. 31, if Johnson’s schedule is passed by the British House of Commons.

ALSO READ: Brexit hard-liner Boris Johnson wins race to become UK’s next prime minister

The United Kingdom by itself, represents one of Canada’s top five destinations for investments and top 10 markets for goods and services.

It has also been a gateway for Canadian companies that do business in the European Union, which is Canada’s second- or third-biggest trading partner after the United States and China, depending on the measure.

About 40 per cent of Canadian trade in merchandise with the EU goes through United Kingdom, says Achim Hurrelmann, a political scientist and co-director of Carleton University’s Centre for European Studies in Ottawa.

Without a good free-trade deal between Brussels and London, companies may reconsider “whether they want to stay in the United Kingdom or … go to Dublin (Ireland), or to France or to Germany or the Netherlands.”

“To some extent, that has already happened but my impression is that most companies have been staying put and observing and waiting (to see) what is happening,” Hurrelmann says.

He says that Johnson’s proposed deal would provide more time to sort out the U.K.’s trade relationship with the EU but also with Canada.

“Canada wants to have a trade deal with the U.K. and the U.K. wants to have one with Canada as well,” Hurrelmann says.

“But the question, of course, is will we have time to actually work that out properly or will that have to be very rushed after a no-deal Brexit.”

Mark Camilleri, a Brussels-based Canadian at the Canada EU Trade and Investment Association, says he thinks it’s fair to say “that having any deal is better than having no deal” if only to reduce uncertainty.

He says that having no U.K.-EU. deal “it would potentially be very destabilizing for businesses, including Canadian businesses that are not just based in the U.K. but also based in the EU that are trading to the U.K.”

But Camilleri noted the British Parliament has rejected Theresa May’s proposals on three occasions so ’one has to hold one’s breath as to whether or not (Johnson’s deal) will get through.”

David Paddon, The Canadian Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

UPDATED: Red Deer has nine active COVID-19 cases

Number of cases increased by 107 Friday

Good turnout for first annual suicide awareness walk

About 40 Ponoka residents came out for the event

Man sentenced to 7 years for gas-and-dash death of Alberta gas station owner

Ki Yun Jo was killed after Mitchell Sydlowski sped off in a stolen cube van without paying for $198 of fuel

Quirky Canadian comedy ‘Schitt’s Creek’ takes Emmys by storm with comedy sweep

Toronto-raised Daniel Levy and Ottawa-born Annie Murphy both got supporting actor nods

Best of Ponoka Readers’ Choice Awards 2020

Enter for your chance to win a $300 gift card for Evergreen Co-op

Six injured, man in custody following BB gun incident in Alberta, RCMP say

Airdrie’s downtown core was told to shelter-in-place, while others nearby were asked to stay inside

Nearly 20 per cent of COVID-19 infections among health-care workers by late July

WHO acknowledged the possibility that COVID-19 might be spread in the air under certain conditions

Wetaskiwin RCMP make arrests for Hit and Run to residence

Damage estimates are expected to be in excess of $20,000.

Young Canadians have curtailed vaping during pandemic, survey finds

The survey funded by Heart & Stroke also found the decrease in vaping frequency is most notable in British Columbia and Ontario

“My world exploded,” says Bentley-area farmer who’s swather was struck by a motorist

Dennis Duncan was a mile from home when his swather was struck by another travelling at high speeds

UPDATE: Last kidnapping suspect arrested

Amber Knickle has been arrested and remains in police custody

Most Read