Negotiations between the United Kingdom (UK) and Canada for a post-Brexit trade deal have come to a halt after almost two years of talks. The main dispute revolves around issues related to beef and cheese.
Canada has been urging the UK to lift its ban on hormone-treated beef, which Canadian producers claim effectively prevents them from accessing the British market. Conversely, the UK has raised concerns about the 245% import taxes that Canada imposed on British cheese at the beginning of the year.
The breakdown in negotiations has broader implications, including the possibility of higher tariffs on British car firms and a deterioration in the UK’s trading terms with Canada compared to what it had under the European Union (EU) deal.
Minette Batters, president of the National Farmers’ Union of England and Wales, expressed satisfaction that the UK government did not compromise on hormone-treated beef. However, the British Chambers of Commerce (BCC) and the Society of Motor Manufacturers and Traders (SMMT) viewed the news as unwelcome.
The UK government stated that it would only negotiate deals that benefit the British people and reserved the right to pause talks if progress was lacking. They also remained open to restarting discussions with Canada in the future.
These trade negotiations were a result of the UK’s exit from the EU, and both countries were working on a bespoke agreement since March 2022. Talks had been ongoing to extend agreements that allowed the UK to sell cars and cheese to Canada without high import taxes. These agreements have now expired or are set to expire, leading to increased tariffs.
This marks the first time the UK has officially suspended trade talks with a partner since departing from the EU’s trading regime in 2021.
Total goods trade between the UK and Canada was valued at £19.2 billion in 2020, with UK imports from Canada amounting to £7.3 billion and UK exports to Canada reaching £11.8 billion.
While UK farmers welcomed the government’s stance on hormone-treated beef, others, including dairy exporters and parts of the manufacturing industry, expressed concerns about losing trade preferences. The breakdown in talks also raised concerns about the future of UK car exports to Canada.
Labour’s shadow business secretary and SNP’s international trade spokesperson criticized the Conservative government’s handling of trade negotiations post-Brexit.
Former Environment Secretary George Eustice supported the decision to suspend negotiations and emphasized the importance of Canada complying with British food standards while ensuring access for UK dairy products into the Canadian market.
