Failed trade deal with Canada: The current trade negotiations between the United Kingdom and Canada have abruptly come to an unexpected end due to an unforeseen change of events on the part of the United Kingdom. The focal point of contention? None other than the heated debate over how much tariff-free access U.K. producers should have to the Canadian cheese market.
The issue escalated when a post-Brexit transitional agreement allowed tariff-free British cheese on Canadian stores for three years. However, this generous agreement ended at the conclusion of the preceding year. Negotiations to establish a more permanent bilateral trade accord to replace the United Kingdom’s trade benefits under Canada’s Comprehensive Economic and Trade Agreement (CETA) with the European Union are on hold.
“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,” emphasized a spokesperson for the U.K. government in a statement.
Trade Minister Mary Ng highlighted Canada’s unhappiness with the unexpected stop. Emphasizing that the Canadian side is still at the bargaining table and dedicated to getting the greatest agreement for Canadian farmers. The Dairy Farmers of Canada has continuously opposed increased access to the Canadian dairy sector in trade negotiations.
As if the cheese dispute wasn’t enough. Talks on drafting new rules for automotive trade between the two nations have also hit a snag. With preferential access set to expire for British automotive exports to Canada on March 1, negotiations on defining new “rules of origin” are at a standstill.
The implications of a failed trade deal with Canada?
The implications of a failed deal loom large for the U.K., particularly concerning exports of cheese and automotive products. On the Canadian side, a delay in reaching an agreement aligns with demands from Canadian livestock producers, urging the government to harmonize food inspection standards before finalizing any deal with the U.K.
The complexity deepens as the U.K. faces potential risks to its exports. While Canada, strategically, has less immediate economic urgency to finalize a deal. The article explores the intricate web of trade agreements. Each with its own set of rules, and the potential consequences for both nations if a resolution isn’t reached.
In the absence of a bespoke bilateral agreement, the current trade continuity agreement between Canada and the U.K. will persist. However, this “CETA rollover” deal was intended as a transitional arrangement, leaving the future of trade relations uncertain.
As negotiators reach a standstill, the piece focuses attention on the economic importance of the United Kingdom as Canada’s third-largest trading partner
highlighting the over $46 billion in two-way goods and services trade in 2022. Stay tuned for updates on this riveting trade story, which has far-reaching consequences on both sides of the Atlantic.
