March 31, 2024

Auto Trade Rules Between Canada And UK Expired This Week

According to a report from Reuters, yesterday, Monday, April 1, Rules of Origin (ROO) arrangements between the United Kingdom (UK) and Canadian governments that had allowed UK automakers to avoid certain Canadian tariffs expired. The end to the arrangements means UK carmakers that do not meet content requirements could face a tariff of 6.1 percent in Canada.

Extending the UK’s exemption from these penalties had been a point of discussion among the two governments for months as they tried to negotiate a new trade deal, but those talks broke down last week. As Reuters  explained, under the terms of the ROO arrangements, UK goods that used inputs either from the European Union, or that were processed in the bloc, should count as made in the UK and therefore qualify for lower tariffs in Canada.

According to Reuters, British auto exports to Canada were worth almost 700 million pounds ($883.68 million) in 2023.

In related news: as The Associated Press reported, France’s Senate has voted overwhelmingly to reject legislation to ratify a 2017 trade deal between the EU and Canada that has been criticized by farmers as bringing unfair competition from abroad. The EU-Canada Comprehensive Economic and Trade Agreement, or CETA, provisionally went into effect in September 2017 after all EU governments agreed to it, but its full implementation required approval by each national parliament.

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