UK, Canada Sign Post Brexit Continuity Agreement

by Mike Godfrey, Tax-News.com, Washington

10 December 2020

Canada and the UK have formally signed a post-Brexit trade continuity agreement that will apply from January 1, 2021.

The UK-EU Brexit transition period ends on December 31, 2020. The Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada will no longer apply to the UK as of January 1, 2021.

A Trade Continuity Agreement (TCA) between the UK and Canada was agreed in principle on November 21, 2020, and was signed on December 9, 2020. The TCA aims to preserve the main benefits of CETA.

In the case of Canada, this will ensure the continued elimination of tariffs on 98 percent of products exported to the UK. The UK will benefit from tariff-free trade on 98 percent of goods that can be exported to Canada. In addition, tariffs will be eliminated on UK car exports to Canada.

Canada and the UK have agreed to enter into negotiations for a comprehensive free trade agreement within one year of the ratification of the TCA.

The TCA must be ratified in each partner state. The Canadian Government has introduced legislation to implement the TCA.

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