EU and Canada sign agreement expected to increase bilateral trade by over 20%
2013-10-22 17:36:46
The Canadian Prime Minister Stephen Harper and the European Commission confirmed the negotiations had concluded in Brussels and businesses in the UK stand to benefit significantly from this as the UK is Canada’s second biggest trading partner in the world, behind the US. The latest estimates suggest that UK exports to Canada would increase by 29% or £2.3 billion and Canadian exports to the UK would increase by 15%.
“It’s great news that Prime Minister Harper and President Barroso have concluded this historic trade deal and I want to thank them for their commitment throughout these negotiations” said Prime Minister David Cameron.
He added that “the EU has delivered its largest free trade agreement ever and proved that it can be an asset for British business. The deal will inject £1.3 billion to the UK economy, boost exports by almost a third and create thousands of new jobs.
”I’ve made it a priority to push for a US-EU trade deal. We must now seize on today’s success and focus our efforts on concluding all the other trade deals on the table. Concluding those would be worth over £20 billion to the UK and help British businesses thrive in the global race.
The overall expected benefit to the EU is £7.9 billion and £5.6 billion for Canada each year. Canada will also gain greater access to a single market of 500 million people. The boost to Canada’s economy is C$12 billion and the equivalent to 80,000 jobs.
In 2012, UK-Canada trade flows in goods and services were £15.1 billion (UK exported £8.1 billion to Canada, and Canada exported £ 7 billion to the UK). EU-Canada trade flows were over £70 billion in goods and services in 2011.
Total EU exports to Canada will rise by 24.3% or £14 billion while Canadian bilateral exports to the EU will rise by 20.6% or £7.3 billion.
UK exports to Canada in processed foods will rocket by almost 500% in the long-run (or £1.3 billion per year). Chemicals (£260 million per year) and machinery (£160 million per year) would also see significant increases in exports.
The UK is Canada’s second largest investment destination, after the US. The UK is Canada’s launch pad for Europe, the Middle East and Africa. Canadian foreign direct investment in the UK was nearly £18 billion at the end of 2011, which has roughly doubled over the past 10 years.
Canadian beef and pork farmers, pharmaceutical companies, fishing industry and metals industry will benefit the most and it will also help those looking to win public procurement contracts.
Major Canadian investors in the UK include Bombardier, the biggest single investor in Northern Ireland, which announced this month that it will be creating another 250 jobs in Belfast. There are major investments in financial services and ICT, including in Tech City in London. Other Canadian investors include Thomson Reuters, McCain, CGI, Ontario Teachers' Pension Plan, Blackberry, Mitel, Cirque du Soleil, OMERS, Nexen and MDA.