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The Department for International Trade is seeking input from businesses and others to shape its trade negotiations with Canada and Mexico later in the year.

Continuity deals were signed with both countries when the UK left the EU and the government has announced it is looking for a “next generation of deals” that are “trailblazing”.

Brexit minister Lord Frost hailed the upcoming Canadian talks as an example of how the UK was free to make its own trade deals, during evidence to the European Scrutiny Committee yesterday.

The DIT’s call for input, which will last for eight weeks, is asking for views on what the UK’s ambitions should be for these free trade agreements. Responses will help inform the UK’s position as it prepares for negotiations later in the year.

Businesses can add their feedback on these deals from today (18 May) until 12 July on here.

Canadian talks

The UK-Canada trade deal, which was ratified with Canada on 19 March, supports £22.4bn trade in 2019, reports City AM.

It is designed to “help both countries build back better from the COVID-19 pandemic by supporting high-quality jobs in industries such as automotive and food and drink,” according to the Department for International Trade.

Under the deal £42bn of tariffs will be lifted from UK exports of cars, soft drinks, beef, fish and chocolate bars. Canada will also export salmon, biscuits and maple syrup tariff-free.

The deal maintained preferential access to the UK market for Canadian exporters and businesses, and eliminated tariffs on 98% of goods exported from this country.

Untapped potential

Speaking to Canadian chambers of commerce, UK trade minister Ranil Jayawardena cited “untapped potential” for trade in sectors like aerospace, creative industries and financial and business services, reports Inside Logistics.

He also identified rules around keeping data within borders, as well as access for agricultural products as potential stumbling blocks. The interim deal with the UK doesn't provide any incremental market access for Canada’s supply-managed dairy sector.

According to government figures, Mexico was the UK’s 45th largest trading partner in 2020 with a total trade of £3.6 billion in 2020, a decrease of 29.2% or £1.5 billion from 2019.

Currently the 15th largest economy in the world and home to more than 130 million consumers, in 2017 PwC forecast that the Mexican market could become the seventh largest economy in the world by 2050.

The UK’s top five exports to Mexico were medical and pharmaceuticals, beverages, mechanical power generators, cars, and organic chemicals.

Aztec boost?

However, the Byline Times has reported that a £5 billion EU continuity trade deal with Mexico, hailed by Whitehall as an “Aztec Brexit Boost”, according to the Express, has become obsolete – after the EU signed a more generous and comprehensive deal between its 27 members states and Mexico.

According to a report from the House of Lords’ International Agreements Committee, the UK could now have to wait another three years to catch-up with the EU even if talks on a new agreement begin this year.  

The Lords reports flagged up other issues with the Mexico deal, claiming British fruit and vegetables and Commonwealth banana growers could lose out to competition from Mexico.

The Society of Motor Manufacturers and Traders also told peers that it was worried about the enhanced EU deal.

Scotch whisky and cars still face 20% tariffs in Mexico although Mexican fruit and vegetables, metals and precious stones at advantageous rates under the continuity trade deal that has been in place since the beginning of the year.

However, like Canada, Mexico is a member of the CPTPP and deals with both countries could be advantageous to the UK’s application to join the group.