Boris Johnson and Justin Trudeau sealed the ‘agreement in principle’ in a video call today as the British Prime Minister self-isolates for a second time, according to the Department for International Trade (DIT).
The agreement rolls over the settlement signed by the EU and Canada in the Comprehensive Economic and Trade Agreement (Ceta).
Although the deal does not give any new benefits to British businesses, it avoids an estimated £42million of tariffs UK exporters would have faced if the Government had failed to broker an agreement, the DIT said.
The Government said the arrangement paves the way for negotiations to begin next year for a new comprehensive deal with Canada, which has been touted as one of the benefits of the UK leaving the EU.
Ministers hope future negotiations will go further on ‘digital trade, women’s economic empowerment and the environment’, according to DIT.
Industry groups expressed relief that businesses will not face higher trade tariffs with Canada from next month.
Federation of Small Businesses chairman Mike Cherry said: ‘There was always a danger that the end of the transition period would mean losing wider international market access that we enjoyed as part of EU membership.
‘The fact that this new agreement upholds the small business chapter that was previously in place is very welcome. We look forward to such chapters being at the centre of all future UK trade deals.’
Confederation of British Industry director-general Josh Hardie said it was ‘great news for businesses’ and that the agreement can ‘lay the foundations for an even deeper trade agreement’.
International Trade Secretary Liz Truss also expressed her relief. She said: ‘Today’s agreement underpins £20 billion worth of trade and locks in certainty for thousands of jobs.
‘We look forward to striking a new more ambitious deal next year with the aim of creating more opportunities for businesses and improving the lives of people across the country.’
Before it is formally signed, the UK-Canada Trade Continuity Agreement will be subject to final legal checks.
Get in touch with our news team by emailing us at email@example.com.
For more stories like this, check our news page.
Get your need-to-know
latest news, feel-good stories, analysis and more
Thanks for reading the whole article. If you wish to get an daily update about UK and Canada agree to continue trading under EU terms after Brexit , click on the bell button to subscribe for the notifications.