The United Kingdom has agreed to an interim trade deal with Canada, giving itself another buffer for post-Brexit economic dealings in 2021 -- as it continues to pursue deals with the United States and European Union.
Described by the British government as a “stopgap,” the deal announced Saturday rolls over existing trade agreements between the U.K. and Canada, and opens the door to negotiations in 2021 on a specific UK-Canada trade pact.
The government said it gives certainty for British businesses and locks in about $27 billion in trade between the countries. The deal includes zero tariffs on car exports, and tariff-free trade on goods including beef, fish and seafood. It will cover about 1.5 percent of the U.K.’s total trade in goods and services.
Britain imports products such as salmon and maple syrup from the Commonwealth country that also recognizes Queen Elizabeth II as head of state.
“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,” Prime Minister Boris Johnson said in a statement.
“Our negotiators have been working flat out to secure trade deals for the UK, and from as early next year we have agreed to start work on a new, bespoke trade deal with Canada that will go even further in meeting the needs of our economy,” he said.
It’s one of 53 countries the U.K. has signed agreements with ahead of the finalization of its departure from the E.U. at the end of the year -- at which point it will no longer be covered by the umbrella of deals forged by the union. Brits voted to leave the bloc in 2016 and officially left it in January -- leading to a transition period until the end of the year.
It has yet to strike a deal with the E.U., although negotiations are ongoing. If no deal is agreed to, then the countries will move into World Trade Organization terms.
The U.K. has been working with the U.S. to thrash out a vital trade deal, but that deal may prove less certain than it appeared under a Trump administration. The president was very receptive to the idea of such a deal, given his pro-Brexit stance.
President-elect Joe Biden has warned there will not be such a deal if Britain is seen to undermine the 1998 Good Friday peace agreement as part of its own regulations governing post-Brexit trade at the border between Ireland and Northern Ireland.
“We can’t allow the Good Friday Agreement that brought peace to Northern Ireland to become a casualty of Brexit,” Biden tweeted in September. “Any trade deal between the U.S. and U.K. must be contingent upon respect for the Agreement and preventing the return of a hard border. Period.”
The Associated Press contributed to this report.