UK suspends trade talks with Canada as deal extension falters

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After almost two years of talks on a post-Brexit deal, the UK has stopped its trade discussions with Canada.
After almost two years of talks on a post-Brexit deal, the UK has stopped its trade discussions with Canada.

After almost two years of talks on a post-Brexit deal, the UK has stopped its trade discussions with Canada.

Breakdown in Talks: UK and Canada Fail to Extend Trade Agreement

The United Kingdom has formally suspended trade talks with Canada after negotiations to extend the existing trade agreement faltered. 

The current terms, rolled over from the UK’s time as an EU member, allowed for the continuation of trade in goods without high import taxes.

Consequences of the Suspension: UK Trading Terms Now Inferior

This marks the first instance of the UK formally halting talks with a trade partner since leaving the EU trading regime in 2021. 

The breakdown in negotiations means the UK’s trading terms with Canada will be less favorable than when it was part of the EU’s deal with the country.

Implications for British Industries: Higher Tariffs for Cars and Cheese

British car manufacturers are now facing the prospect of higher tariffs to sell into the Canadian market starting from April. Higher tariffs on British cheese had already been implemented earlier this month, following the expiration of the previous terms at the end of 2023.

Stalled Talks and Political Pressures: Issues on the Table

Negotiations between the UK and Canada on a new bespoke agreement began in March 2022. Political pressures from Canada’s domestic cheese producers and requests for the UK to ease restrictions on hormone-treated beef have been key sticking points in the talks.

Disappointment and Confidence in Future Negotiations: Reactions from Both Sides

Canada’s trade minister, Mary Ng, expressed disappointment at the pause in talks and emphasized the need for a mutually beneficial agreement. 

A spokeswoman for the minister conveyed disappointment over the UK’s maintenance of market access barriers for Canada’s agriculture industry.

The UK government, while acknowledging the right to pause negotiations if progress is lacking, remains open to restarting talks with Canada in the future to build a stronger trading relationship. 

A government source indicated willingness to resume negotiations if Canada returns to the table with a serious offer.

Trade Statistics: Overview of UK-Canada Goods Trade

In 2020, total goods trade between the UK and Canada amounted to £19.2 billion. UK imports from Canada were valued at £7.3 billion, while UK exports to Canada were worth £11.8 billion. The suspension of talks introduces uncertainties in this trading relationship and raises questions about the future economic ties between the two nations.

Gary Monroe

Gary Monroe is a seasoned contributor to the Los Angeles Business Magazine, where he offers insightful analysis on local business trends and economic developments. With a focus on Los Angeles' dynamic commercial landscape, Gary's articles provide valuable perspectives for entrepreneurs and business professionals in the city.

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