Canada and Britain reach trade deal as Brexit date looms

OTTAWA—Canada and Britain have struck a new trade deal, beating the Dec. 31 Brexit deadline that would have triggered new tariffs on a range of Canadian exports.

The interim deal will replace Canada’s current agreement with Britain under the European Union that currently covers trade between the two countries, until a new formal pact can be negotiated in the coming year.

Prime Minister Justin Trudeau and his British counterpart, Boris Johnson, announced the deal during a live video news conference on Saturday morning.

“This is a good moment,” Trudeau said, dubbing the deal the Canada-U.K. Trade Continuity Agreement. He said the new pact sent a strong message about the importance of global trade.

“This continued sign of our collaboration, co-operation, and deep, deep friendship and partnership is really important not just for people in our two countries, but people around the world as well,” the prime minister added.

Johnson said free trade would help both countries “bounce back” to rebuild their economies after the pandemic.

“But I also think that Canada and the U.K. share a perspective about building back greener,” he said. “And using that, this is a moment in which to tackle climate change, but also to create hundreds of thousands of jobs in green technologies.”

Britain’s decision to leave the EU means that the Comprehensive Economic and Trade Agreement, or CETA, will no longer apply to the country at the end of the year.

The new deal preserves CETA’s key provision until a more comprehensive agreement can be reached later: the elimination of tariffs on 98 per cent of Canadian exports to Britain, which is Canada’s fifth largest trading partner with $29 billion in two-way merchandise trade in 2019.