Canada has long been known as a country that is extremely close to the United States commercially and economically hundreds of billions of dollars in goods and services flow between the two neighbors annually and Supply chains are intertwined to the US trade action with 25% tariffs against a155 billion boost Canada's GDP by anywhere from 4 to 7% and that would be more than $200 billion a year Well Canada's leaders are apparently rethinking their ties to the United States of the European Council and the European commission talked up closing ties and their bid to ratify the seta
free trade agreement with Ottawa but protectionist moves tariffs and recent diplomatic frictions May accelerate Canada's search for new markets to reduce its dependence on the United States one of the most interesting options in this search is the canzuk project which is centered around the United Kingdom and Australia New Zealand this concept invis is that Canada could take advantage of its historical and cultural commonalities and move towards a new economic Union even preferring it over the United States but what is kzo why might Canada be interested in such an option and where does the European Union's
role fit into the equation as we seek answers to these questions we will also examine the reshaping of Canada United Kingdom relations against the backdrop of Canada's preference for the European Union or the United Kingdom over the United States Canada's frustration with trade and Border disputes with Washington is playing a role in particular the steel aluminum tariffs under Donald Trump the Hardline usmca negotiations the by America policies and tensions in sectors ranging from wood products to dairy products have led Canadian businesses and politicians to look for Alternatives as of Plan B the Trudeau government expanded
the European Union and United Kingdom markets before brexit Canada traded extensively with the United Kingdom a member of the European Union after brexit there was a risk of being deprived of this trade when the United Kingdom left the European Union which is now being prevented by the new agreement in that case there is a significant segment of the Canadian public that says why bother with the United States the European Union and the United Kingdom are already huge markets and the political risks are lower Canadian Diplomat Ralph Goodale said that as Canada prepares for United States
President Donald Trump's impending tariffs it should look to strengthen trade relations with other countries the former member of Parliament and current Canadian High Commissioner to the United Kingdom said he believes Canada should seize every trade and marketing opportunity it can find globally we must continue to go further and stronger Goodell said he described Canada's trade relationship with the United Kingdom as very good referring to the robust Free Trade Agreement negotiated at the end of brexit and implemented in the spring of 2021 the overall economic relationship is worth about 500 billion of which about 10% is
bilateral trade he said goodel said the trade agreement provides 99% dutyfree and quota free two-way access between Canada and the United Kingdom the United Kingdom is a reliable partner Canada is a reliable partner and we do excellent business together good L notes that even if the American Market is large close and familiar Canada can realistically expect its trade with countries like the United Kingdom to increase as it has with the United States this is really the path of least resistance he said but trade diversification is a universal good we want to diversify our trade well
beyond the United States so we both have common goals in terms of volume figures goodel said the European Union will always be a dominant factor in the relationship in addition the Canadian Prime Minister said that the United Kingdom and the United States will be important trading partners but that Canada must start looking for Alternatives we currently have 15 trade agreements that engage with 51 different countries around the world and give us Market access to 2third of global GDP Goodell said Canada and the United Kingdom have seen a major approachment in the post brexit era since
leaving the European Union the United Kingdom has been engaged in intense diplomacy for its its own trade deals one of the country's biggest goals was to sign a comprehensive free trade agreement with Canada this is based on the ca comprehensive economic and trade agreement between Canada and the European Union the United Kingdom was part of CA when it was a member of the European Union but wanted to take over in its own name after brexit negotiations for a final Canada United Kingdom Free Trade Agreement have accelerated while temporary extensions are being negotiated the United States
used to be Canada's largest trading partner but it also has a sizable trade volume with the United Kingdom the announcement of a 99% dutyfree free trade regime has attracted considerable attention likewise Canada welcomes this opportunity to diversify its export markets as the United Kingdom seeks new Global Partners in the wake of brexit Commonwealth ties may be more important than ever the major commonwealth countries Canada Australia New Zealand share many historical cultural and legal commonalities with the United Kingdom common language a similar legal system Westminster type parliamentary traditions and the symbolic position of the crown allfuel
the canzuk debate kuk is an acronym that stands for Canada Australia New Zealand United Kingdom its proponents argue that by establishing a free movement and trade zone these four countries can both gain economic power and increased geopolitical solidarity the idea of a union with no Customs barriers common passports or free Visa arrangements and even close coordination on defense and foreign policy is very attractive to some however concrete steps are not yet clear nevertheless the trade agreement that the United Kingdom and Canada are trying to sign may be seen as a preliminary stage of canzuk so
how close to reality is the question will Canada turn towards the United Kingdom European Union Australia New Zealand axis instead of the United States realistically the Canadian economy is highly integrated into the United States Market there is a 9,000 km border deep Supply chains through NAFTA or usmca as it is now called in cultural Affinity therefore it is unlikely that the otta administration will make a sharp break with the United States and say let's leave the United States and go to another Market however in recent years the United States imposition of tariffs on steel and
aluminum tariffs threatening the automotive parts trade and fre quent frictions in areas such as dairy products have strengthened the let's not put all our eggs in one basket let's look for Alternatives mentality in Canada Ottawa is trying to expand exports to the European Union through the ca comprehensive economic and trade agreement with the European Union and is preparing a new free trade agreement with the United Kingdom it is also seeking close cooperation with Japan Korea and Assan countries in the asia-pacific market in short every time Ottawa says let's not be dependent on the United States
centered model it sets its sights on strong English-speaking economies or Giant Markets like the European Union on the one hand there is the issue of the European Union even though the United Kingdom has left the European Union Canada's CA comprehensive economic and trade agreement with the European Union continues this agreement allows Canadian products to enter the European market largely duty-free or with low tariffs however the volatile post brexit relationship between London and Brussels can sometimes pose challenges for Canada for example Canadian Goods used to be able to enter the European Union and the United Kingdom
Under the same framework but now there are two separate Arrangements if Canada can successfully conclude free trade negotiations with the United Kingdom these markets will be clearly separated again this would minimize Customs barriers with both the European Union and the United Kingdom on the other hand Canada is geographically quite far from Europe and Britain and transportation costs may be higher but the digitalization of global trade and new methods of logistics can partly make these distances irrelevant if these four countries were to come together they would form a block with a population of around 130 million
people a GDP of around 6 trillion to7 trillion and some of the most stable Democratic systems in the world say supporters of the kzer idea they also argue that similarities in language law culture and Commonwealth ties would make for a much more coherent Union than the European Union however critics highlight obstacles such as geographical distance economic diversity different immigration policies and strategic priorities Australia and New Zealand for example are focused on the asia-pacific region the United Kingdom is engaged in post brexit diplomatic negotiations around Europe and Canada is geographically fully integrated with the United States
it is doubtful that these different orientations can form a common Confederation or real Union but many wonder if at least a free trade free movement framework is possible for Canada it would be overly optimistic in the short term to expect a change of course such as leaving the United States and moving to the European Union or the United Kingdom because there is the reality of geography and Supply chains the United States Market is right across the border huge population cultural proximity institutional Frameworks such as NAFTA usmca it would be unrealistic to erase these in one
stroke nevertheless the approach of having a foothold outside the United States makes sense as a North American Country Canada can ensure itself against United States protectionist policies by turning to overseas markets moreover there is no shortage of Canadian exporters who are fed up with trade frictions with Washington this paves the way for markets like the European Union and the United Kingdom from there the maybe kanuk idea is being brought to the agenda this may mean high level coordination and free movement rather than a full economic Union on the other hand Australia and New Zealand are
similar to Canada in many ways geographical distance aside large territory low population density Rich natural resources Agricultural and Mining sectors English-speaking populations legal and political similarities so a canzuk union would open up new trade opportunities that could diversify Canada economic spectrum why might Canada welcome this potential first export lobbies tired of United States protectionism are saying let's turn to European or British Markets second there is relatively little protectionism in European or British Markets compared to the United States third Canada may want to reinforce its more peaceful and Multicultural image with the European Union and the
United Kingdom moreover Commonwealth ties provide a fertile ground for a policy based on diplomacy and soft power fourth while Canada already has a deal with the European Union through CA comprehensive economic and trade agreement it could diversify its markets despite geographical distance through a new trade agreement with the United Kingdom and modern comprehensive agreements with Australia and New Zealand this fits with strategic objectives such as reducing unilateral dependence on the United States market for agricultural exports Canada's trump card Ed if necessary I will redirect part of my market to Europe or Britain could serve as
a shield against trumpian moves of course the European Union is also confident that we are a big enough market to attract Canada the United Kingdom is trying to rebuild every single deal it lost after brexit therefore Canada may be in the most advantageous position by keeping CA comprehensive economic and trade agreement with the European Union and making a separate deal with the United Kingdom it is not yet clear whether this will lead to a gigantic Common Market scenario like canzuk plus European Union in the future or just a pile of bilateral agreements but Canada is
looking for partners with more predictable liberal trade policies than the United States in conclusion when asked can Canada the United Kingdom and the European Union be chosen over the United States a complete rupture seems unlikely but ottawa's leadership is definitely saying let us develop a plan B and C let us avoid United States protectionism in fact if the 99% duty-free trade commitment with the United Kingdom comes into effect it will be a major breakthrough if Australia and New Zealand are added to the mix the canzuk idea could take on a little more substance the combined
population of the four countries is around 130 million perhaps not a giant Common Market but a mediumsized block if it can integrate this with the European Union Canada could become more resistant to tariffs imposed by the United States still the United States will remain Canada's largest trading partner thanks to its geographical proximity and huge Market power but Ottawa is determined to diversify its trade strategy and reinforce the message that we have other options what is your take on this can Canada really be overwhelmed by United States pressure and turned to Europe and Britain or a
geographic IAL in economic realities and the United States relationship still the most obvious choice would the European Union be uncomfortable with the approachment of Canada and the United Kingdom in this process or would it see it as integrated into its global trade strategy all these questions will continue to seek answers in the complex dynamics of global trade Canada is trying to create options for itself in this complexity we will continue to follow these developments together we would be grateful if you subscribe to our Channel and share your comments thank you for watching goodbye
