The UK has halted its trade negotiations with Canada after nearly two years of discussions on a post-Brexit agreement. The current trade between the two nations operates under a deal that the UK carried over from its time as an EU member. This temporary agreement allowed the UK to continue selling cars and cheese without high import taxes. However, discussions about extending these terms as part of a new deal have now collapsed. This is the first time the UK has officially suspended talks with a trade partner since leaving the EU trading system in 2021. As a result, the UK’s trading conditions with Canada will now be less favourable than when it was part of the EU’s agreement with Canada.
British car companies now face the possibility of higher tariffs to sell into the Canadian market from April. Higher Canadian tariffs on British cheese had already been implemented earlier this month, after the previous terms expired at the end of 2023. Negotiations between the two countries on reaching a custom agreement have been ongoing since March 2022.
Canada’s government had been under domestic pressure from cheese producers and had also been advocating for the UK to lift a ban on hormone-treated beef, which Canadian producers claim effectively excludes them from the British market.
A spokeswoman for Canada’s trade minister expressed disappointment at the pause in talks and conveyed this to UK Business Secretary Kemi Badenoch. She added that the UK’s decision to maintain market access barriers for Canada’s agriculture industry and its unwillingness to reach a mutual agreement has only stalled negotiations.
A spokeswoman for the UK government stated that it reserves the right to “pause negotiations with any country if progress is not being made”. The UK government remains open to resuming talks with Canada in the future to build a stronger trading relationship.
In 2020, total goods trade between the two countries was valued at £19.2bn, with UK imports from Canada worth £7.3bn and UK exports to Canada worth £11.8bn.