After almost two years of negotiations, the UK and Canada have walked away from trade deal talks, following a disagreement over agri-goods.
The countries had been trading under a rollover agreement that largely replicated the previous arrangements from when the UK was a member of the EU.
However, mounting tensions around the trade of agri-products – such as beef and cheese – with Canada’s government experiencing pressure from its producers, which ultimately led to the collapse of negotiations.
Disappointment all round
This is believed to be the first time that the UK has formally suspended talks with a partner since leaving EU’s trade regime in 2021.
A UK government spokesperson said: “We have always said we will only negotiate trade deals that deliver for the British people. And we reserve the right to pause negotiations with any country if progress is not being made.
“We remain open to restarting talks with Canada in the future to build a stronger trading relationship that benefits businesses and consumers on both sides of the Atlantic.”
Representatives of Canada’s government also expressed disappointment at the talks’ failure but emphasised what they said was the UK’s unwillingness to concede on food products.
Mary Ng, a spokesperson for Canada’s trade minister said: “[The UK’s] decision to continue to maintain market access barriers for our agriculture industry and unwillingness to reach a mutual agreement has only stalled negotiations.”
Criticism was also levied at the UK delegation for failing to act quickly enough to ensure an extension of another agreement that protected its cheese exports from tariffs through an extension of EU benefits.
Cheese exports at risk
Earlier this year, UK cheesemakers lost tariff-free access to the Canadian cheese market.
A special provision has been agreed that enabled UK cheesemakers to continue trading under the more generous quota of EU products.
‘The cheese letters’ ensured that UK’s exports contributed to the EU’s quota of internationally sourced cheese – a much more generous allowance than the “non-EU reserve fund” which is already 95% filled by Swiss and Norwegian products.
From this year, those seeking to sell cheese to Canada will be required to partner with a Canadian importer and secure a license to fulfil the “non-EU source reserve” and products falling outside the quote will face an import duty of 245%, which could price producers out of the market.
Beef
Cheese hasn’t been the only sticking point, over the past year Canada’s government has faced pressure from its farmers not to engage with UK on trade in beef products.
As the UK won’t accept Canadian beef exports due to the use of a banned growth hormone, Ottawa deemed this created an unfair playing field in which UK farmers had “unfettered access” to Canada while Canadian farmers were shut out of the UK.
Last year, a coalition of Canadian farming groups campaigned to prevent the accession of the UK to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), of which Canada is also a member, writing that the arrangement “does not meet a fair standard of competition for Canadian farmers and producers”.