The United Kingdom and Canada have agreed to a new trade deal.
The agreement covers bilateral trade worth about 20 billion British pounds ($27 billion U.S.), the British trade office said. The U.K. is Canada’s third-largest export market after the U.S. and China. Last year, Canada was the U.K.’s 15th-largest export market.
Highlights of the new trade agreement include:
An estimated 42 million-pound tariff burden on U.K. exports has been saved.
Future zero tariffs on U.K. car exports to Canada, which were worth 757 million pounds in 2019.
Tariff-free trade on 98% of export goods to Canada including beef, fish, seafood and soft drinks.
U.K. producers will continue to benefit from zero tariffs on many agricultural and seafood exports including chocolate, confectionary, fruit and vegetables, bread, pastries and fish.
The deal with Canada is the second major trade agreement announced by Britain in less than a month, after it agreed to terms with Japan in late October. Without the new accord, the U.K. and Canada would face tariffs on trade starting January 1, when the Brexit transition period ends.
The U.K. still needs to roll over 14 other European Union agreements by January 1 to avoid defaulting to World Trade Organization terms, including with nations such as Mexico, Turkey and Singapore — agreements which cover about 60 billion pounds of trade with Britain.
Canada and the U.K. have agreed to continue negotiations next year to expand their commercial trade agreements to cover digital trade, the environment and women’s economic empowerment, the U.K.’s Department for International Trade said in a written statement.