Canada and the UK have agreed to a renewal trade deal, the countries announced on Saturday, vowing to negotiate a more comprehensive deal after the UK’s post-Brexit transition period ends.
The UK is preparing to complete its exit from the European Union in late December and has negotiated dozens of bilateral deals as part of its effort to maintain trade and mitigate the potential economic effects of Brexit.
The renewal agreement between the United Kingdom and Canada allows the provisions of the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union that specifically refer to trade between the two countries, CBC News reported.
“This is a good time,” Canadian Prime Minister Justin Trudeau said during a video call with his British counterpart, Boris Johnson, and the respective trade ministers of the two countries, which was shared on social media.
Trudeau said the deal, dubbed the Canada-UK Business Continuity Agreement, is “to make sure our businesses and yours continue to function well together.”
He stressed the importance of maintaining strong ties with the United Kingdom, which he said is Canada’s fifth largest trading partner globally and its main partner in Europe.
More negotiations next year
In a statement, the British government said negotiations would begin next year on a comprehensive agreement with Canada.
Meanwhile, the refinancing deal “ensures certainty for UK companies exchanging goods and services with Canada” worth around $ 35bn (£ 20bn), he said.
“This is a fantastic deal for Britain that secures transatlantic trade with one of our closest allies,” Johnson said in the statement.
“British companies export everything from electric cars to sparkling wine to Canada, and today’s agreement will ensure that trade goes from strength to strength.”
The deal still needs to undergo legal checks before it is officially signed, the UK government said.
On the Canadian side, it must be approved by Parliament before it can go into effect, CBC News reported.
The UK has pushed to sign bilateral trade deals ahead of its departure from the EU to mitigate the potential negative economic effects of Brexit.
The UK is currently in talks with the EU to set the terms of its future trade relationship for when the post-Brexit transition period ends on December 31.