On Friday, January 26th, in a significant development, the United Kingdom suspended its trade negotiations with Canada, marking a challenging phase in its post-Brexit trade aspirations. The breakdown, primarily over disputes involving hormone-treated beef, cars, and cheese, underscores the UK’s complexities in forging new trade relationships.
Negotiations between the UK and Canada, which began in March 2022, have hit a deadlock after nearly two years. The core issue revolves around Canada’s insistence on the UK relaxing its ban on hormone-treated beef, a move that British producers believe would unfairly impact the domestic market. Concurrently, the UK has raised concerns over the hefty 245% import taxes imposed by Canada on British cheese at the start of 2023.
This pause in talks between the UK and Canada signals a potential increase in tariffs for British car firms, a sector already apprehensive about the future. The current trading terms between the two nations, governed by a deal rolled over from the UK’s time as an EU member, are set to worsen, affecting various industries.
Minette Batters, President of the National Farmers’ Union of England and Wales, expressed relief over the UK government’s stance on hormone-treated beef. However, the British Chambers of Commerce (BCC) and the Society of Motor Manufacturers and Traders (SMMT) have voiced concerns, highlighting the adverse impact on dairy exporters and the manufacturing industry.
Downing Street remains firm, stating that the government will only negotiate deals that serve British interests and is open to resuming talks with Canada in the future. This stance is echoed by Canada’s trade minister, Mary Ng, who emphasizes the need for a mutually beneficial agreement. A spokesperson for Ng said, “Their decision to continue to maintain market access barriers for our agriculture industry and unwillingness to reach a mutual agreement has only stalled negotiations. The UK is a long-standing trading partner and I am confident that we can negotiate an agreement that is win-win for Canada and for the UK. But let me be clear – we will not negotiate an agreement that is not good for Canadians – and not good for our Canadian businesses, farmers, and workers.”
The suspension of these talks marks the first time the UK has formally halted negotiations with a trade partner since leaving the EU trading regime in 2021. The total goods trade between the UK and Canada was valued at £19.2 billion in 2020, illustrating the significance of this relationship.
Shadow Secretary of State for Business and Trade Jonathan Reynolds and SNP International Trade spokesperson Richard Thomson have criticized the Conservative government for this setback, citing it as a failure to uphold post-Brexit trade promises.
As the UK navigates its new path outside the EU, the outcome of these negotiations will be closely watched, reflecting the nation’s ability to establish independent trade agreements that align with its standards and economic interests.