Canada, UK reach transitional trade agreement

Agreement provides provisions similar to CETA

Canada, UK reach interim trade agreement maintaining many provisions of CETA (Photo: Government of Canada)

The government of Canada announced Saturday the conclusion of “successful” transitional trade talks with the U.K.

The press release said the two countries reached an interim deal, the Canada-United Kingdom Trade Continuity Agreement, as a placeholder for a more comprehensive trade agreement. The U.K.’s departure from the European Union and “by extension the Canada-European Union Comprehensive Economic and Trade Agreement (CETA)” necessitated the change.

CETA no longer applies to the U.K. as of the first of the year.

The new agreement allows bilateral access to many provisions of CETA, importantly eliminating tariffs on 98% of Canadian goods exported to the U.K.

“This will provide a competitive edge to Canadian exporters and businesses who will maintain preferential access to the United Kingdom market, even as the country exits the EU,” the release stated.

Mary Ng, Canada’s minister of small business, export promotion and international trade, and Elizabeth Truss, the U.K.’s secretary of state for international trade, represented their respective countries in the deal.

“This trade continuity agreement between Canada and the United Kingdom assures we maintain our strong and mutually beneficial trade relationship. I am looking forward to working with Secretary of State Truss to ensure a smooth transition in Canada-United Kingdom trade relations – ensuring Canadian workers, exporters and businesses of all sizes continue to benefit,” stated Ng.

In 2019, merchandise trade between the two countries represented $29 billion, making the U.K. Canada’s fifth-largest trade partner and its largest export market in Europe.

Click for more FreightWaves articles by Todd Maiden.

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Todd Maiden

Based in Richmond, VA, Todd is the finance editor at FreightWaves. Prior to joining FreightWaves, he covered the TLs, LTLs, railroads and brokers for RBC Capital Markets and BB&T Capital Markets. Todd began his career in banking and finance before moving over to transportation equity research where he provided stock recommendations for publicly traded transportation companies.