TORONTO -- As the Conservatives swept to power in the U.K. with a pledge to 鈥淕et Brexit Done,鈥� business leaders in Canada are watching with interest to see what a new free trade deal with Britain could look like.
Uncertainty hangs over the future of Britain鈥檚 trade relations with countries including Canada since the U.K. voted to leave the European Union in 2016. The ensuing uncertainty has damaged business confidence and curbed investment in the U.K.
Business experts who spoke to CTV News advocated a 鈥渨ait-and-see鈥� approach for the Canadian government, urging officials to see what kind of deal is struck between the U.K. and E.U. when the divorce deal goes through.
The U.K. is Canada鈥檚 fifth largest trading partner, a relationship worth around $25.5 billion in 2018. One report suggests that the two countries are linked by 94 treaties and international agreements.
British Prime Minister Boris Johnson has promised the U.K. will leave the E.U. by Jan. 31 2020.
鈥淥nce Brexit happens, Canada will have better access to the European Union than the United Kingdom will,鈥� University of Toronto professor Mel Cappe told CTV News.
Canada has an existing trade agreement with the E.U. under CETA, the Comprehensive Economic and Trade Agreement.
鈥淲e鈥檙e in a very favoured position because we have access to 400 million people and we鈥檒l have a question about how we have access to 60 million people. That鈥檚 easily managed,鈥� Cappe said.
鈥淭he problem is for some manufacturers and some service companies, like financial institutions, the rules of trade between Canada and the United Kingdom will be up in the air. And we鈥檇 better figure out how that鈥檚 going to work, quickly.鈥�
Cappe, a former High Commissioner for Canada to the U.K, said for the next 11 months, CETA rules will apply.
鈥淔ollowing Dec. 31, 2020 we need to figure out how Bombardier is going to import its fuselages, all of which are made in Belfast (Northern Ireland) into Canada to be assembled into airplanes,鈥� he said.
鈥淲hat we need to do is wait and see what kind of deal Britain negotiates with the European Union. We don鈥檛 want to be the first ones to have a deal that then the U.K. uses as a template with the European Union.
鈥淲e want to see what they do with the European Union and try to get a better deal for Canada.鈥�
But don鈥檛 expect a quick turnaround, Cappe warned.
鈥淚t took us three years to negotiate a new NAFTA (North American Free Trade Agreement) based on the NAFTA we already had,鈥� he said.
鈥淒o you think the United Kingdom鈥檚 going to get a deal in 11 months with the European Union starting from scratch? I don鈥檛 think so. We had better take our time and figure out what our interests are.
鈥淚t鈥檚 going to be much more challenging for Britain because their new deal, even when they negotiate it between Jan. 31 and Dec. 31 2020, will have to be ratified in 27 parliaments. That should be quite a challenge.
鈥淲e will have an arrangement with the U.K. through either Commonwealth preferences or the WTO (World Trade Organization) and the WTO rules will undoubtedly still apply so it won鈥檛 be chaos but it will be a change and we need to adapt to the change.鈥�
Jason Langrish, executive director of the Canada Europe Roundtable for Business, added that concerns over the border between Ireland and the U.K. and Scottish independence create further uncertainty and that these are issues businesses have to look at in terms of their forward planning.
Adam Taylor, president of Canadian business consultancy Export Action Global, was an advisor to the Harper government that negotiated CETA. He told CTV News there were large pieces of CETA that could be 鈥渃ut and pasted鈥� into a new Canada-U.K. agreement.
鈥淭he question is, are there going to be new concessions that both sides have to potentially consider?鈥� he said.
鈥淭he U.K. is our biggest trading partner in Europe and we absolutely need to preserve that type of trading relationship. I think we should actually be negotiating a comprehensive and ambitious deal.
鈥淭he good news about these types of trade negotiations if there鈥檚 political will on both sides creative solutions are available.鈥�
