LONDON: The UK and Canada have agreed a deal to continue trading under the same terms as the current European Union agreement after the Brexit transition period ends, in a relief for businesses fearing high tariffs.
The government said the agreement paves the way for negotiations to begin next year for a new comprehensive deal with Canada, which has been touted as one of the benefits of the UK leaving the bloc.
Prime Minister Boris Johnson and Canadian counterpart Justin Trudeau sealed the “agreement in principle” in a video call on Saturday, the Department for International Trade (DIT) said. The agreement rolls over the settlement agreed by the EU with Canada in the Comprehensive Economic and Trade Agreement (Ceta) and does not give any new benefits to UK businesses.
But the DIT said it avoids an estimated £42 million of tariffs exporters in the UK would have faced if the government had failed to get a deal. Ministers hope future negotiations will go further on “digital trade, women’s economic empowerment and the environment”, according to DIT.
Industry groups expressed relief that businesses will not face higher trade tariffs with Canada next month. Federation of Small Businesses chairman Mike Cherry said: “There was always a danger that the end of the transition period would mean losing wider international market access that we enjoyed as part of EU membership.
“The fact that this new agreement upholds the small business chapter that was previously in place is very welcome. We look forward to such chapters being at the centre of all future UK trade deals.”
Confederation of British Industry director-general Josh Hardie said it was “great news for businesses” and that the agreement can “lay the foundations for an even deeper trade agreement”.
International Trade Secretary Liz Truss said: “Today’s agreement underpins £20 billion worth of trade and locks in certainty for thousands of jobs. We look forward to striking a new more ambitious deal next year with the aim of creating more opportunities for businesses and improving the lives of people across the country.”
Before it is formally signed, the UK-Canada Trade Continuity Agreement will be subject to final legal checks.
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