By Promit Mukherjee

OTTAWA (Reuters) -Canada and the United Kingdom agreed on Sunday to set up a trade working group which will submit its recommendations to the prime ministers of the respective countries within the next six months, a joint statement by the two governments said.

British Prime Minister Keir Starmer arrived in Canada for bilateral meetings with Prime Minister Mark Carney before the G7 leaders' summit in Alberta from Sunday to Tuesday.

Carney has been reaching out to allies to strengthen and diversify the country's trade as its industries, especially steel, aluminum and automobiles, face U.S. tariffs.

"We will establish a new structured UK-Canada Economic and Trade Working Group to deepen our existing trading relationship further," the joint statement by the two prime ministers said.

The working group would seek to address market access barriers, expand arrangements into areas such as digital trade, and explore cooperation to develop critical minerals and artificial intelligence infrastructure, the statement said.

While the UK is an important trading partner for Canada, it represents only a small share of Canada's exports. In 2024, the UK represented 3.6% of exports and 1.2% of imports for the country, according to the Conference Board of Canada.

Exports to the UK are mainly dominated by gold and energy products.

The joint statement also said that Canada would introduce legislation in the second half of the year to ratify the UK's accession to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), a free trade group of 11 countries.

The group comprises Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and Canada.

The UK gained access to nine countries under the Indo-Pacific trade treaty last year and is still awaiting its ratification by Canada and Mexico.

The two countries will also expand defense collaboration including support for Ukraine, the statement said.

(Reporting by Promit Mukherjee; Editing by Chizu Nomiyama)