The United Kingdom on Wednesday signed a trade agreement with Canada, days before the end of the Brexit transition period, removing the risk of an estimated £42 million ($56.15 million) tariff burden on UK exports.
The deal, agreed on Nov. 21, is signed in Ottawa by David Reed, the UK’s Deputy High Commissioner for Canada, and John Hannaford, Canadian Deputy Minister of International Trade.
The rolling over of the current EU–Canada trade deal means that UK businesses can continue their £20 billion ($26.57 billion) trading of goods and services with Canada after Dec. 31, when the UK is no longer a part of the EU’s Economic and Trade Agreement.
“This is a brilliant deal for Global Britain. It secures £20 [billion] worth of trade with a friend and ally that shares our commitment to free enterprise, democracy, and free trade. It provides certainty for car and food and drink exporters in particular, and paves the way for a more advanced deal that goes further and faster in modern areas like digital and data, women’s economic empowerment and the environment,” Liz Truss, secretary of state for International Trade, said in a statement.
“The deal also takes us a step closer to joining the Trans-Pacific Partnership, a high standards agreement of 11 dynamic Pacific nations. Membership would deepen market access for our businesses, help turn us into a global hub for tech and services trade, and strengthen the global consensus for rules-based free trade,” she added.
The two countries will the negotiations of a “new, tailor-made UK–Canada trade deal” in 2021.
The UK and Japan on Oct. 23 signed the UK–Japan Comprehensive Economic Partnership Agreement, Britain’s first major post-Brexit free trade agreement.
The British government saw “much wider strategic significance” in the deal, Truss said, as it opened “a clear pathway to membership” of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
CPTPP is a landmark 11-country trade deal that includes Australia, New Zealand, Canada, Japan, Mexico, Singapore, Vietnam, Brunei, Chile, Malaysia, and Peru.
The UK started exploring membership of CPTPP in 2018 in the hope of stimulating exports after Brexit.
Alexander Zhang contributed to this report.