Canada and the United Kingdom have reached an interim trade deal that will extend free trade between the two countries once the UK leaves the European Union.
The deal was announced by Canadian Prime Minister Justin Trudeau and UK Prime Minister Boris Johnson on Saturday, November 21. Negotiations for a permanent free trade agreement will continue in 2021.
Beginning in January 2021, trade between Canada and the UK will be governed by the Canada-United Kingdom Trade Continuity Agreement (Canada-UK TCA). The deal will extend the elimination of tariffs on the vast majority (98%) of Canadian exports to Britain and provide Canadian exporters with preferential access to the UK market.
“This agreement will provide stability and predictability for businesses, exporters and workers in both Canada and the United Kingdom,” said a release from Global Affairs Canada.
Following the UK’s decision to leave the European Union, the two countries agreed to let the Comprehensive Economic and Trade Agreement (CETA) continue until the end of 2020. The new deal will replace CETA, replicating most of its terms and conditions in a Canada-UK specific context, but must still be approved by both governments.
With almost $30 billion in two-way merchandise trade in 2019, the UK is Canada’s fifth-largest trading partner.
“Now we get to continue to work on a bespoke agreement, a comprehensive agreement, over the coming years that will really maximize our trade opportunities and boost things for everyone,” said Prime Minister Trudeau.
The UK government has noted that a permanent deal could include “the potential to go further in areas like digital trade, the environment and women’s economic empowerment.”
This deal maintains Canada’s G7-leading global access through free trade deals, including the United States-Mexico-Canada Agreement (USMCA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and CETA. In total, we have trade agreements with 60 countries representing 1.6 billion customers and more than 60% of the global economy.
Waterloo has become a common place to expand for companies looking to access the North American market, with convenient access to Toronto, New York, Boston and Chicago. In total, more than 150 million consumers are within a one-day drive.