By Tom Geoghegan, Harrison Jones, Tom Espiner & Jessica MurphyBBC NewsReutersThe UK and Canada are pointing fingers at each other after a disagreement over beef and cheese resulted in the breakdown of trade negotiations. The talks had been ongoing for almost two years to reach a new agreement to replace the previous one that was in place when the UK was part of the European Union. However, the UK put a halt to the discussions on Thursday due to a lack of progress on the two food products. This disruption could potentially lead to more challenging trade conditions, affecting 1.4% of the UK’s total trade in the 12 months leading to June 2023. The two countries had traded goods worth £19.2bn in 2020, with UK imports from Canada valued at £7.3bn and UK exports to Canada at £11.8bn. This collapse in talks could have implications for consumers and farmers in both countries as well as for the car industry. Here’s the likely impact on all three areas at a glance. BeefBeef farmers in the UK may view the collapse of talks as a significant victory, given that Canada’s farming industry has been expressing frustration due to feeling disadvantaged under an interim agreement. The Canadian government had been urging the UK to ease a ban on hormone-treated beef. However, the collapse in talks would be seen as a win for British farmers. The National Farmers Union (NFU) has been lobbying the government to shield its members from the competition they face from New Zealand and Australia, under free trade deals with the UK. These deals allow for the removal of tariffs on their exports, posing a challenge for UK beef farmers. Minette Batters, the president of the Nation Farmers’ Union of England and Wales, expressed that, although walking away from the Canadian trade deal would have been difficult, she believes it was the right decision. The Canadian Cattle Association criticized the UK for not fully accepting Canada’s food safety system, which is well-regarded globally. The beef disagreement has been a point of contention in trade relations between the two nations before. Canadian farming groups have protested the UK’s accession to a trade agreement with concerns about reciprocal access, demanding either acceptance of Canada’s food safety system or compensation for their losses. CheeseThe UK ranks as Canada’s fifth largest cheese supplier, but the breakdown of talks does not bode well for cheese exports from the UK. Ever since the start of 2024, a 245% tariff has been imposed on UK cheese exporters, affecting prices. Although the UK’s cheese exports to Canada were valued at £18.7m in 2022, accounting for 2.4% of total cheese exports, the situation poses a significant challenge for exporters. Coombe Castle International, the largest UK cheese exporter to Canada, expressed disappointment over the suspended talks as it has been exporting to Canada since 1980. The company anticipates difficulties in finding new markets quickly, with a third of its business tied up in Canada after 40 years. Dairy UK commented that Canada had not shown a willingness to improve access to its cheese market, leading to a regrettable pause in talks. The expiry of the agreement allowing the UK to sell cheese to Canada without high tariffs has already disrupted the industry, affecting small cheese shops and importers. The pause in trade talks has further jeopardized the bilateral relationships built over decades, as expressed by the Canadian Cheese Council of Canada. CarsThere are concerns about whether the UK will be able to continue selling cars to Canada without facing high import taxes. The UK’s largest goods export to Canada is cars, with exports worth £745.8m in the 12 months leading to the end of the second quarter of 2023. The UK previously benefited from a time-limited agreement, allowing it to sell cars to Canada without high import taxes, but this arrangement is now uncertain. The Society of Motor Manufacturers and Traders (SMMT) emphasized the importance of the Canadian market for UK automotive products, expressing disappointment over the suspension of trade talks and appealing for a return to negotiations. There are no significant imports of Canadian-manufactured cars into the UK. The Canadian automobile industry has had a muted reaction to the news.
Disagreement in UK-Canada trade: Effect on cheese, beef, and cars
