Britain and Canada have struck a rollover trade deal to protect the lucrative flow of goods and services between the two countries after Brexit.
The two countries will continue trading under the same terms as the current European Union agreement after the Brexit transition period ends.
The UK government said the agreement paves the way for negotiations to begin next year on a new comprehensive deal with Canada, which has been touted as one of the benefits of the UK leaving the EU.
Boris Johnson and Canadian counterpart Justin Trudeau sealed the "agreement in principle" in a video call on Saturday.
The agreement does not give any new benefits to businesses but rolls over the Comprehensive Economic and Trade Agreement reached by the EU and Canada after seven years of negotiations.
Welcoming the continuity deal, Mr Trudeau suggested a new comprehensive trade agreement with the UK would take several years to negotiate.
Industry groups expressed relief that businesses will not face higher trade tariffs with Canada next month but warned that similar deals were urgently needed.
Mr Johnson said the extension was "a fantastic agreement for Britain".
He added: "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."