"The UK and Canada have locked in their existing trading relationship, worth $ 27 billion ( €22.5 billion), and agreed to begin negotiating on a new more ambitious trade deal as early as next year," the British government said in a statement.
The transition period between the UK and the European Union expires on December 31, 2020, which means that Britain will no longer be included in agreements signed between the bloc and other countries.
The deal signed with Canada means the two countries will continue to trade under the same rules as previously, while they negotiate a "bespoke" agreement.
Canada accounted for about 1.5% of the U.K.'s total trade in goods and services last year.
Britain ships goods ranging from electric cars to sparkling wine to Canada, and imports products such as salmon and maple syrup from the Commonwealth country that also recognizes Queen Elizabeth II as head of state.
Canadian Prime Minister Justin Trudeau described the signing as "a good moment."
"The trade relationship and the historic relationship between Canada and the UK is just so deep that being able to make sure we're seamlessly transitioning through with this, what are we calling it, that's right, the Canada-UK trade continuity agreement, which is perfect to make sure that our businesses and yours continue to work well together."
"The UK is our fifth largest trading partner in the world," he added.
As we reported earlier, the UK and Ukraine signed a historic Political, Free Trade, and Strategic Partnership Agreement on October 8 as London looked ahead towards the country’s post-Brexit future in 2021.
UK Prime Minister Boris Johnson hailed the agreement as proof that Britain was Ukraine’s “most fervent supporter.” It marks a new chapter in UK-Ukraine relations and includes an ambitious free trade component that could now see economic ties strengthen considerably.
The trade element of the new UK-Ukraine Agreement envisages preferential treatment on a range of goods and services. It is based on the 2014 EU-Ukraine Association Agreement. Around 98% of Ukrainian goods will now receive greater access to the UK market, with tariff quotas maintained in most cases.