UK, Canada Blame Each Other as Trade-Deal Talks Break Down


(Bloomberg) —

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The UK has paused talks to strike a free-trade deal with Canada, with each side accusing the other of obstructing progress.

Britain will only negotiate trade deals that “deliver” for its people and reserves the right to pause talks that aren’t moving forward, a government spokesperson said Thursday.

“We remain open to restoring talks with Canada in the future to build a stronger trading relationship that benefits businesses and consumers on both sides of the Atlantic,” read a post published by Susannah Goshko, British High Commissioner to Canada, on X, formerly known as Twitter.

The two countries announced the formal start of negotiations on a new trade deal in 2022, seeking to replace an interim deal put in place following Britain’s departure from the European Union.

The UK had pushed to extend a temporary arrangement that allowed exports of British cheese to Canada under low tariffs, similar to those enjoyed by European Union members. That deal expired Dec. 31.

The UK also wanted Canada to extend country-of-origin rules that allowed the nation to export products that contained parts from the EU. The expiration of the rules at the end of March could drive up the prices of British goods — such as vehicles — in Canada, unless the UK changes its supply chains.

The timelines for these measures were clear to both parties and were intended to ensure that the negotiations were prioritized, according to a Canadian government official familiar with the matter. The UK didn’t meet those timelines, the person said.

Canada, for its part, hoped to secure access for its beef and pork exports, which don’t currently meet UK regulatory standards.

The UK government’s decision to maintain market-access barriers for Canada’s agriculture industry and unwillingness to reach a mutual agreement stalled negotiations, said Shanti Cosentino, a spokesperson for Trade Minister Mary Ng.

She said Ng had been in touch with her UK counterpart, Trade Secretary Kemi Badenoch, to express Canada’s disappointment.

Ng told reporters in Ottawa that the UK is Canada’s third-largest, single-country trading partner at over C$46 billion ($34 billion) a year.

“I’m disappointed that they have paused these negotiations,” Ng said. “I’m very confident that we will be able to get back to the table, and I would encourage my colleagues in the United Kingdom, let’s get back to the table.”

Agriculture Minister Lawrence MacAulay defended Canada’s dairy-import quotas, which have long been a source of tension with trading partners. The country has controlled dairy supplies for decades, limiting domestic production and applying heavy tariffs to imports, in an effort to stabilize incomes for local farmers.

“When it comes down to signing the trade deal, we will sign a trade deal that’s good for Canadian farmers,” MacAulay said. “The supply-management sector is protected in this country, and will be.”

(Updates with conflicts starting in fifth paragraph)

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