• U.K. represents more than 40 percent of Canada’s exports to EU
  • Canada’s finance minister is optimistic CETA will soon be done

Finance Minister Bill Morneau said Canada is “waiting and ready” to begin talks with U.K. officials on deepening trade ties in the wake of the country’s vote last month to leave the European Union.

While Canada is focused on concluding its already negotiated free trade agreement with the European Union, it’s prepared to begin separate discussions with the U.K. at any time, Morneau said in an interview with Bloomberg in Chengdu, China.

“We’re waiting and ready to have those discussions recognizing we may not be very first on the list of issues,” said Morneau, who was in China to attend a meeting of Group of 20 officials. “From our standpoint, Britain is a very important trading partner and will continue to be so.”

Canadian officials, including Morneau, have expressed optimism the Brexit vote won’t impede efforts to conclude the Comprehensive Economic and Trade Agreement, or CETA, which was initially agreed to in principle in October 2013. That’s even after the EU put its landmark free-trade accord with Canada on a slow track for approval, increasing the risk of a veto.

Optimistic on CETA

Morneau said he’s optimistic Canada and the EU will soon get a deal done in a “reasonable time frame,” suggesting completion of the pact would be a signal of normalcy for the region.

“We want to be part of that,” he said. “We want to be talking about the importance of a strong Europe in the global economy and a resolution to this in an orderly manner that can ensure that we can continue to trade.”

The pact, which would eliminate about 98 percent of all Canadian and EU tariff lines on the first day of its implementation, is seen in Canada as an historic opportunity to diversify its exports away from the U.S. However, the big catch for Canada had been the U.K., which receives more than 40 percent of Canadian exports to the EU.

“Our position is that we are ready to talk with the Brits when they are ready,” Morneau said.

Other highlights of the interview included:

*Morneau said global growth is slower than he’d like and G-20 countries should consider additional structural reforms and fiscal measures to help their economies expand.

*Governments need to be more focused on “inclusive” growth that is widely shared, he said, adding the Brexit vote and debates in the U.S. over trade are a “wake-up call” for global policy makers.

*Fiscal measures announced in the March federal budget, including the start this month of enhanced child benefit payments, should begin helping the Canadian economy, Morneau said. As a result, the government doesn’t expect it will need to change its budget forecasts even with slower than anticipated global growth. “What we put in our budget, we know these are the things that are going to make a difference,” he said.

*Housing price inflation in Toronto and Vancouver is a “continuing focus” for the government and a “real concern” for people in those cities, the finance minister said. At the same time, they recognize it’s not exclusively a federal government issue.

*“We do recognize though the tools to make an impact are not exclusively those of the federal government,” Morneau said. A working group with officials from Ontario, British Columbia, Toronto and Vancouver will “look at all of the tools in our tool box and how we can make sure the housing market remains resilient. Of course, our main issue is to make sure the economy remains strong and we don’t create any potential risk,” he said.

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