Canada and UK strike trade agreement to prevent tariffs

Canada and UK strike trade agreement to prevent tariffs

Until a new post-Brexit trade agreement is finalized, an interim deal keeps tariffs at current levels

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Canada and the United Kingdom signed an agreement to prevent tariffs from applying once Britain left the European Union. The agreement, which was announced on December 22, 2020, allows temporary arrangements for tariffs to remain at current levels until the full trade deal is approved. As a result, Canadian importers and exporters will not be subject to tariffs that were set to automatically begin on January 1, 2021.

Background

Previously, trade between Canada and the United Kingdom was covered under the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union. With the United Kingdom leaving the European Union on January 1, 2021, Canada negotiated a new trade deal with the UK, but Canada did not ratify this trade agreement before the end of 2020. To ensure continuity as of January 1, 2021, Canada issued the United Kingdom Trade Continuity Remission Order, 2021 #20-1135 to essentially extend the benefits of the CETA to Britain until the new trade deal is ratified.

Importers may have to adjust their importation paperwork to benefit from the remission order.

For more information, contact your KPMG advisor.

Information is current to January 12, 2021. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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