Richard has welcomed the news that International Trade Secretary Liz Truss has secured an agreement for a continuity trade deal with “friend and ally” Canada. The UK and Canada have locked in their existing trading relationship, worth £20 billion, and agreed to begin negotiating a new more ambitious trade deal as early as next year.
On a video call on Saturday, Prime Minister Boris Johnson and Canadian Prime Minister Justin Trudeau, joined by International Trade Secretary Liz Truss and her Canadian counterpart, Minister of Small Business, Export Promotion and International Trade Mary Ng agreed an ‘agreement in principle’ to roll over current EU-Canada trading arrangements and begin negotiations on a new, bespoke UK-Canada trade deal in 2021.
The agreement to rollover provisions of the Comprehensive Economic and Trade Agreement (CETA) gives certainty for UK businesses exporting goods and services to Canada worth £11.4 billion. It will support the British automotive manufacturing and food and drink industries which between them provide jobs for more than half a million people across the UK.
Overall, an estimated £42 million tariff burden on UK exports has been saved. The benefits locked in under the agreement reached today include:
- Future zero tariffs on UK car exports to Canada, which were worth £757 million last year, supporting factories and jobs in our communities. Without this agreement, Canada’s standard tariffs on cars of 6.1% would apply.
- Tariff-free trade on 98% of goods that can be exported to Canada including beef, fish and seafood and soft drinks.
- UK producers will continue to benefit from zero tariffs on many agricultural and seafood exports including chocolate, confectionary, fruit and vegetables, bread, pastries and fish. Last year the UK exported £344m worth of agri-food goods to Canada.
- Without the continuity agreement, Canadian food products such as maple syrup, biscuits and salmon could have been more expensive for British consumers as they would face taxes of up to 8% when entering the UK under the UK Global Tariff.
The deal provides the foundation for both countries to negotiate a new trade deal, that will improve on the existing EU-Canada agreement. It 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.
In under two years, the UK Government has signed or agreed in principle trade agreements with 53 countries, most recently including Japan, Ukraine, Côte d’Ivoire, Kenya and now Canada. Total United Kingdom trade with these countries was worth £164 billion in 2019, or 11.6% of UK bilateral trade. All of these continuity agreements have maintained the UK's high standards, including workers’ rights and food standards.
Commenting, Richard said: “I’m delighted that we’ve agreed a continuity trade deal with Canada – this keeps our relationship with Canada the same as how it was when we were in the EU, and is the starting point for us entering talks with them in 2021.
“This will bring certainty for businesses and opportunities for people on both sides
“We’ve now established many trade deals worldwide, including one with Japan, and we are working on our future trading relationships with other countries including Australia, New Zealand and the USA.”
