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November 23, 2020

Canada, UK Sign Interim Trade Deal As Brexit Looms

As The Associated Press reported, Canada and the United Kingdom (UK) signed an interim trade deal on November 21 that give the two counties “more time to negotiate future trading rules as the British government prepares the country for business life outside the European Union.”

The interim agreement allows current trade rules to remain in effect while negotiators work on a new bilateral agreement. Those rules govern $27 billion in trade between the two countries, or about 1.5 percent of the UK’s total trade in goods and services in 2019.

Additionally, as CBC explains, the agreement “extends the elimination of tariffs on 98 percent of goods exported between the two countries and sets the stage for negotiations toward a permanent and more ambitious deal in the new year.” Without a new agreement, trade between the UK and Canada could be hampered by “tariffs and increased paperwork” once the UK leaves the European Union.

Canadian Prime Minister Justin Trudeau said, “Now we get to continue to work on a bespoke agreement, a comprehensive agreement, over the coming years that will really maximize our trade opportunities and boost things for everyone.”

The agreement will be subject to final legal checks before it is formally signed.