Canada and the UK have reached a temporary post-Brexit trade deal, Prime Minister Justin Trudeau and British Prime Minister Boris Johnson announced on Saturday.
“Now that we continue to work on a separate and comprehensive agreement, in the coming years will really maximize and boost the commercial opportunity,” Trudeau said.
“Free trade is an important part of the path we get out of COVID, but I also think Canada and the UK share their views on building a greener back,” Johnson said.
Mr. Johnson also took some time to congratulate Prime Minister Trudeau for taking steps to bring Canada net-zero carbon emissions by 2050.
The Canada-UK Trade Continuity Agreement expands the tariff elimination on 98% of goods exported between the two countries and sets the stage for negotiations towards a more enduring and ambitious agreement in the New Year. The agreement may include “potential for further advancement in areas such as digital commerce, the environment and economic empowerment for women,” the UK government statement said.
The announcement comes as world leaders convene online for the G20 summit.
After the UK withdrew from the European Union last winter, the two countries agreed to have an Economic and Comprehensive Trade Agreement (CETA) – a bilateral trade agreement taking effect between Canada and the EU. from 2017 – continue to apply for Canada-UK until the end of 2020.
Negotiating a new comprehensive bilateral trade agreement between the two sides that can be fully ratified and come into effect before 1 January is difficult, as the UK has no jurisdiction over trade matters. until complete leaving the EU.
Instead, the two sides agreed to “flip” the CETA in a short-term transition agreement, copying most of the existing language and renegotiating only what is needed to fit UK trade.
Now that the negotiations have ended, the deal must be approved by both governments. In the case of Canada, the law that changes the rules and laws (including the country’s tariffs) to fit into the new agreement must be approved by Parliament.
There is no end date or end time clauses for the transition agreement, but both sides intend to start negotiating towards a permanent deal for replacement next year. Those talks are expected to be more ambitious than what is in the interim agreement.
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