The UK is reportedly close to signing a trade agreement with Canada to replace the existing deal it has through EU membership.
An announcement could come as early as Thursday, according to a Bloomberg report. Without it the two countries would face tariffs from 1 January once the Brexit transition period ends.
The UK currently trades with Canada under the EU-Canada economic and trade deal signed in 2016, which removes tariffs.
The Number 10 spokesman said: “We’re committed to securing a continuity trade deal with Canada before the end of the transition period. Talks are at an advanced stage and are progressing well.”
An agreement is crucial for both sides — the UK is Canada’s fifth biggest trading partner after the US, China, Mexico and japan.
Last week Canadian Prime Minister Justin Trudeau said a trade agreement with the UK should be secured by the end of the year but warned
“The UK hasn’t had to negotiate trade deals in the past few decades, so there is an issue of not really having the bandwidth within government to move forward on this,” Trudeau told the Financial Times.
Last month the UK signed its free trade agreement with Japan, the first deal to be signed since Britain left the EU. International trade secretary Liz Truss hailed the agreement as a “historic” moment for both countries and said the agreement was expected to boost UK trade by an estimated £15.2bn.
A trade agreement would be a major boost for the Prime Minister after Brexit talks stalled again this week. The UK’s Brexit negotiators aiming for a final breakthrough at some point next week.
Time is running out for a deal to be agreed between the two parties with the UK set to crash out of the customs union and single market at the end of next month.
The bloc wants Britain to mirror its regulatory regime for business subsidies in return for zero tariff trade. The UK has made it clear that it doesn’t want to be locked into EU state aid rules and to have more control over fiscal policy.