U.K. suspends trade negotiations with Canada, each accuses the other of not budging

OTTAWA — The United Kingdom is hitting the brakes on trade talks with Canada after Ottawa decided not to extend temporary measures put in place after Brexit.

London announced the pause in negotiations Thursday less than a month before the ninth round of talks towards a permanent trade deal was scheduled to take place.

“Our job is to make sure we protect our farmers and we are going to do that,” Agriculture Minister Lawrence MacAulay said after the news emerged.

Trade between the two countries is governed by an interim deal signed after the U.K. left the European Union, which kept in place most trade rules. 

Two major clauses were written in for a temporary period only. 

A special quota for U.K. cheese imports, which offered the same low-tariff access to the Canadian market as the EU has, expired at the end of last month. 

That has had the effect of giving EU companies more access to Canada’s market, so that German and French cheeses may become more readily available even as the cost of Red Leicester and Stilton is driven up. 

Canada also recently decided not to extend a temporary deal on country-of-origin rules set to expire at the end of March.

The change means that EU components in British products will soon be counted as U.K. goods within certain quotas. That will likely drive up the cost of certain goods, such as luxury cars. 

“We reserve the right to pause negotiations with any country if progress is not being made,” read a statement from the British government. 

“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.”

But Trade Minister Mary Ng’s office blames “stalled negotiations” on a British “unwillingness” to offer something in return, such as budging on a dispute over Canadian meat.

Canada’s cattle sector has been lobbying against a new deal with the U.K. over a long-standing dispute on hormone-treated beef and pork.

The U.K. has said it is unwilling to budge on its policy of banning imports of meats treated with certain hormones that are widely used by Canadian ranchers, who argue the Brits’ concern isn’t grounded in science. 

“Meaningful market access is what’s really important from our agricultural sector,” Ng said on Parliament Hill. “I’m disappointed that they have paused these negotiations.”

She noted that the U.K. is Canada’s third-largest trading partner, and both countries want a fair deal for consumers and industry.

The stalled trade talks come as Canada takes on the role of chairing a separate Pacific Rim trade bloc.

Ottawa initially pushed to include the U.K. in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which covers a smaller range of areas than a bilateral trade deal.

The U.K. concluded negotiations to join the pact last March, but all countries in the deal still need to ratify its membership with legislation. 

Ng still hasn’t served the formal notice to start that process, and analysts with the U.K. Trade Policy Observatory suggest Canada is using this as leverage to get the bilateral deal signed.

Ng would not say what’s holding up Canada’s ratification, but said her top priority is getting Parliament to pass a separate trade deal with Ukraine.

“I want that agreement to be passed. That is really important. But I think that one can do both,” she said. 

“If you take a look at our ambitious government agenda, there are many things making (their) way through Parliament.”

This report by The Canadian Press was first published Jan. 25, 2024.

Dylan Robertson, The Canadian Press