The UK has a trade deal with Canada that will renew the terms of an existing deal between the EU and Canada when the Brexit transition period ends on January 1.
British Prime Minister Boris Johnson and his Canadian counterpart Justin Trudeau settled the tentative deal on Saturday in a video call. Mr Johnson hailed it as “a fantastic deal for Britain, which secures transatlantic trade with one of our closest allies”.
The UK’s exports of goods and services to Canada are worth around £ 20 billion a year.
The UK government hopes the continuity agreement will lay the groundwork for next year’s negotiations on a “tailor-made” trade deal between the UK and Canada.
International Trade Secretary Liz Truss said the deal would bring “certainty” to thousands of businesses.
She added that she hoped that the UK-Canada renewal agreement, like the one recently concluded with Japan, would be a stepping stone to broader trade alliances: “Today marks a new step towards membership in a group of like-minded nations – the Trans-Pacific Partnership. “
Beyond Japan and Canada, the UK has entered into a number of agreements with other countries, including Norway, South Korea and Israel.
But negotiations are also still open with more than a dozen other economies, including Mexico, Vietnam and Egypt – three countries whose combined trade relations with the UK were worth nearly £ 12 billion in 2019 for the only products.
If agreements with them are not in place by January 1, trade terms would revert to basic World Trade Organization terms, with higher tariffs on UK imports and exports.
The deal with Canada comes just days before the last critical point in negotiations on a trade deal between the UK and the EU.
Mr Trudeau told an FT Global Boardroom event this month that he feared the transfer deal would be ready by January 1 due to a ‘lack of bandwidth’ within the UK department. Trade.
Ms. Truss’s allies said the deal with Canada demonstrates the UK’s ability to succeed outside the EU on its own terms.
An aide said the deal was “part of a larger post-Brexit strategic game, based on deeper interconnected exchanges with countries beyond Europe – particularly the vibrant economies of the Americas and the Pacific. “.
The UK’s Department for International Trade said the renewal deal would be particularly beneficial for the automotive, manufacturing and food and beverage sectors.
For example, zero tariffs will continue to apply to UK producers of agricultural exports, while UK car exports to Canada, valued at around £ 757million, will not be subject to customs duties,
CBI Acting Managing Director Josh Hardie said: “Reaching a deal with Canada that ensures business continuity is great news for businesses on both sides of the Atlantic.
Miles Beale, Managing Director of the Wine and Spirit Trade Association, said: “This is a good result for the UK wine and spirits industry. Canada is an important and growing market for UK exporters, especially our small and medium-sized English gin and wine exporters.