Negotiations between the United Kingdom and Canada regarding a post-Brexit trade deal have hit a roadblock, resulting in impending tariffs on British exports to Canada.
Sources familiar with the discussions have confirmed that there will be no eleventh-hour extension to prevent British products from facing additional tariffs at Canadian ports of entry, a development that signifies a significant setback for Britain’s trade agenda.
Effective April 1, exporters of British vehicles, chemicals, and processed foods that rely on components sourced from the European Union will lose their tariff-free access to the Canadian market. This concession, which was part of the U.K.-Canada trade deal extended after Brexit in 2021, is set to expire, leaving British businesses vulnerable to new tariffs.
The inability to secure an extension stems from a deadlock in negotiations, notably over Canadian demands for market access in exchange for hormone-treated beef. British Trade Chief Kemi Badenoch suspended talks in late January due to these demands, effectively halting progress towards a comprehensive trade agreement.
To resume negotiations, Canada would need to address British requests, including the extension of market access for British cheese, which lapsed at the start of the year, and the continued utilization of EU parts in British exports. However, there has been no indication of Canada’s willingness to concede to these demands, according to sources close to the discussions.
Expressing disappointment, a source within the British government remarked, “It’s regrettable that Canada fails to recognize the importance of collaboration among allies to eliminate trade barriers, especially in current times.”
Responding to inquiries, a spokesperson for Canadian trade minister Mary Ng underscored that the expiration of these provisions had been anticipated since the negotiation of the Trade and Cooperation Agreement (TCA) three years ago. While expressing concern about the potential adverse effects on UK businesses exporting to Canada, the spokesperson emphasized Canada’s commitment to safeguarding its own interests.
The impending tariffs are expected to impact various sectors of the British economy, with approximately £700 million worth of automotive exports facing a 6.1 percent tariff starting April 1. Sectors such as chemicals and processed foods, which collectively contributed over £1 billion in exports last year, will also be affected.
Efforts to find a resolution between the UK and Canada have been ongoing for several months, including discussions between Kemi Badenoch and her Canadian counterpart at the WTO in February. Despite these efforts, Canada has thus far shown no willingness to agree to an extension, exacerbating concerns about the future of UK-Canada trade relations.
Get the latest supply chain report news insights at The Supply Chain Report. For international trade resources, visit ADAMftd.com.
#UKCanadaTrade #PostBrexitDeal #TradeNegotiations #BritishExports #TariffsOnUKGoods #TradeDeadlock #CanadaTradeTariffs #UKCanadaRelations #BrexitImpact #TradeBarriers #GlobalTrade #EconomicImpact #ExportChallenges #BritishEconomy #TariffConcerns #TradeSetback #UKTradePolicy #TradeTalks
