Canada, Britain sign interim deal to avoid tariff increase next year

OTTAWA • Canada and Britain have signed a temporary agreement to avoid an increase in tariffs between the two countries after Britain's exit from the European Union single market early next year, Ottawa has said.

At the end of last month, both countries announced they had concluded a provisional post-Brexit trade agreement that would reflect, as of Jan 1, the terms of the deal that Britain benefited from as a member state of the EU.

But the agreement could not be ratified before the Canadian Parliament went into its winter recess, which would have resulted in an automatic increase in tariffs between the two countries on Jan 1.

The temporary deal allows tariffs between the two countries to remain at current levels until the new trade deal is passed in Parliament, a Foreign Ministry statement said on Tuesday.

With the interim agreement, the Canadian government "is making sure businesses can easily continue trading without adding paperwork for businesses and importers", it said in a statement.

"These measures will ensure stability and certainty on both sides of the Atlantic," the ministry added.

Bilateral trade with Britain was worth C$29 billion (S$30 billion) last year, according to official government figures. Britain is the main market for Canadian exports to Europe.

AGENCE FRANCE-PRESSE