By Elishya Perera
LONDON (CWBN)_ The Department of International Trade (DIT) of UK has announced that UK and Canada have agreed to continue trading under the same terms as the current Comprehensive Economic and Trade Agreement (CETA), after the Brexit transition period expires on December 31.
The CETA is a free-trade agreement between Canada and the EU, and the UK would no longer be party to this agreement from January 1, meaning trade between London and Ottawa will face tariffs if a new deal wasn’t agreed.
Therefore, British Prime Minister Boris Johnson, Canadian Prime Minister Justin Trudeau, International Trade Secretary for UK, Liz Truss, and her Canadian counterpart, Mary Ng, on a video call on Saturday (Nov 21), agreed to roll over current trading arrangements under CETA, and begin negotiations on a new, bespoke UK-Canada deal in 2021.
According to the DIT, the agreement on Saturday provides certainty for UK businesses exporting goods and services to Canada worth £11.4 billion. 98 percent of goods, including beef, fish, seafood, can be exported to Canada free of tariff, while the motor vehicle industry, the agricultural sector, chocolate and confectionary exports to Canada will also benefit from zero tariffs.
Meanwhile, British consumers would also be able to purchase Canadian food products such as maple syrup, biscuits and salmon at a lower price, as they would have faced taxes up to 8 percent when entering the UK, if not for the recent agreement.
“This is a fantastic agreement for Britain which secures transatlantic trade with one of our closest allies. British businesses export everything from electric cars to sparkling wine to Canada, and today’s deal will ensure that trade goes from strength to strength,” PM Johnson said.
Canada is Britain’s 12th largest trading partner and in the first nine months of this year, London exported commodities worth C$6.9 billion (US$5.28 billion), and imported C$14 billion (US$10.7 billion) from Ottawa.
Following the agreement on Saturday, Trudeau said that the new deal communicated a strong message about the significance of international trade. “This continued sign of our collaboration, co-operation, and deep, deep friendship and partnership is really important not just for people in our two countries, but people around the world as well,” he said.
The DIT added that the deal provides a foundation to negotiate a new trade agreement next year, which “will be tailored for the British economy with the potential to go further in new areas like digital trade, women’s economic empowerment and the environment.”
Saturday’s agreement means that in under two years, the British government has agreed 53 trade deals with foreign nations, as an independent trading nation post-Brexit.
It also takes the UK one step closer to membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), of which Canada is party to. The CPTPP is one of the world’s biggest free trade areas, covering 13% of the global economy and more than £110bn (US$146.6bn) of trade in 2019.
Edited By Chathushka Perera
