You are here

Britain, Canada agree on deal to keep trading under EU terms

Pact "locks in" the two countries' existing £20b relationship and sets the stage for further talks

London

BRITAIN and Canada agreed on Saturday to continue trading together under existing European Union (EU) terms when the current Brexit transition period ends shortly, the United Kingdom government said.

The Department of International Trade said the deal "locked in" the two countries' existing £20 billion (S$36 billion) trading relationship and set the stage for further negotiations.

UK Prime Minister Boris Johnson and his Canadian counterpart Justin Trudeau agreed in the Saturday video call to rollover current EU-Canada trading arrangements and begin negotiations on a new, UK-Canada trade deal in 2021.

Mr Johnson said in a statement the "fantastic agreement" ensured trade with one of Britain's closest allies would go "from strength to strength".

Your feedback is important to us

Tell us what you think. Email us at btuserfeedback@sph.com.sg

"Our negotiators have been working flat out to secure trade deals for the UK, and from as early next year we have agreed to start work on a new, bespoke trade deal with Canada that will go even further in meeting the needs of our economy," he added.

International Trade Secretary Liz Truss said the agreement created "certainty for thousands of jobs". She added: "The UK is bonded by history, culture and transatlantic trade with our friends and allies in Canada."

The UK has said the agreement with Canada will avoid £42 million in tariffs on British exports.

A week earlier, Mr Trudeau had said that Ottawa and London should be able to agree an "easy" trade deal by the end of the year but added that Britain's "bandwidth" for negotiations was a challenge as it holds talks with several major trade partners at the same time.

Britain is currently locked in fraught talks with the EU to set the terms of their future trading relationship for when the post-Brexit transition period ends on Dec 31.

Following its referendum vote in 2016 to leave the EU, Britain can now strike trade deals of its own.

London is in a rush to secure as many as possible to mitigate any economic hit caused by more restrictive economic relations with the European bloc, which is by far its biggest market. AFP

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes