The uncertainty around Brexit and its impact on global markets continues as tension-filled talks between the United Kingdom and European Union drudge forward. But with the EU-Canada Comprehensive Economic and Trade Agreement set to go into effect on Sept. 21, Canada’s Financial Services sector may have a safety net of sorts.
James Small, counsel in the Trade Advisory Practice of the International Commercial Group at Baker McKenzie’s Toronto office, shared some insights on what CETA means for Canadian financial firms and what to look for as we move towards the UK withdrawing from the EU by March 29, 2019.
Some highlights from James:
“Once in effect, all the rights benefits and protections concerning the cross border trade in financial services between Canada and the EU will be governed by CETA, including any trade involving the UK. After the UK withdraws from the EU on March 29, 2019, the benefits of CETA will be lost between Canada and the UK, but the protections and advantages CETA provides Canadian firms trading financial services into the EU’s single market will remain.
In 2014, Canada exported $1.45 B in financial services to the UK, and only $875 M to the EU. Starting on September 21, Canadian based firms can expand their business in the UK while focusing more on increasing their trade in financial services to the EU. Canadian firms will be able to take advantage of the certainty CETA provides while other firms, including those in the UK will continue to struggle to cope…Once the UK withdraws from the EU, Canadian firms can continue to sell financial services into the EU’s single market much less concerned about the implications of Brexit.
CETA does not come close to providing the same benefits as those available to a financial firm established within the EU’s single market. However, it does offer a greater degree of legal and regulatory certainty than any other agreement currently or likely to be in place to address the fallout from Brexit.”
Click here to read James’ full briefing as he discusses the advantages of CETA and stay tuned for further updates from our trade experts as these discussions continue to unfold.