A Canada-UK trade deal has been agreed for post-Brexit, as Justin Trudeau and Boris Johnson commit to deepening their relationship over environmental issues.
Liz Truss, the International Trade Secretary, on Saturday secured the agreement with "friend and ally" Canada in a move that is expected to pave the way for negotiations on a tailor-made deal between the two countries next year.
The environment, digital trade and women’s economic empowerment are some of the possible areas of collaboration in future discussions.
The formal 'agreement in principle' between the UK and Canada locks in certainty for UK businesses trading goods and services with Canada worth £20bn.
On a four-way Zoom video call, Mr Johnson, Mr Trudeau, Ms Truss and her Canadian counterpart Mary Ng, agreed to roll over current EU-Canada trading arrangements and begin negotiations on a new, bespoke deal in 2021.
The Department for International Trade said it avoids an estimated £42m of tariffs exporters in the UK would have faced if the Government had failed to get a deal.
Mr Johnson said: “This is a fantastic agreement for Britain which secures transatlantic trade with one of our closest allies. British businesses export everything from electric cars to sparkling wine to Canada, and today’s deal will ensure that trade goes from strength to strength.
“Our negotiators have been working flat out to secure trade deals for the UK, and from as early next year we have agreed to start work on a new, bespoke trade deal with Canada that will go even further in meeting the needs of our economy.”
Industry groups expressed relief that businesses will not face higher trade tariffs with Canada next month.
Federation of Small Businesses chairman Mike Cherry said: "There was always a danger that the end of the transition period would mean losing wider international market access that we enjoyed as part of EU membership.
"The fact that this new agreement upholds the small business chapter that was previously in place is very welcome. We look forward to such chapters being at the centre of all future UK trade deals."
Confederation of British Industry director-general Josh Hardie said it was "great news for businesses" and that the agreement can "lay the foundations for an even deeper trade agreement".
International Trade Secretary Liz Truss said: "Today's agreement underpins £20 billion worth of trade and locks in certainty for thousands of jobs.
"We look forward to striking a new more ambitious deal next year with the aim of creating more opportunities for businesses and improving the lives of people across the country."
Before it is formally signed, the UK-Canada Trade Continuity Agreement will be subject to final legal checks.
Canada said the agreement will provide "stability and predictability for businesses, exporters, and workers" in both countries.
In a statement, it added: "Canada and the United Kingdom have long shared a profound and positive relationship, with a long history of working closely together.
"The Government of Canada will continue to work closely with the United Kingdom to further enhance the bilateral trade relationship, including through a mutual commitment to negotiate a comprehensive free trade agreement that can be best tailored to the bilateral relationship and interests."
A source in the Department for International Trade told The Telegraph that the deal as "a big moment" for the UK.
The source said: "It’s huge for business - which needs the certainty - but it’s also part of a much bigger strategic play to deepen trading ties with nations beyond Europe.
"Canada is a key player in the CPTPP agreement of Pacific countries, which we want to join, and is an important part of our vision for trade post-Brexit.
"The deal is further evidence we can succeed as an independent trading nation, and proves more of the naysayers wrong.
"Liz is quietly and effectively getting on with the job. She’s done a great deal with Japan, got this vital continuity deal with Canada, and has other deals in the pipeline with countries that share our core values and beliefs."