The United Kingdom’s decision to suspend trade negotiations with Canada – which have been ongoing since March 2022 – has highlighted the difficulties the country is having in making deals under its own steam – rather than relying on the free trade agreements that were used when it was a member of the European Union.

After a failure to agree on rules around beef imports, and on tariffs for cheese, the UK withdrew from the negotiations, which will likely have a significant impact on the agricultural sector in both countries. The UK’s automotive industry is likely to feel the repercussions as taxes on Canadian imports are likely to be hiked this coming April.

Since the UK left the EU in 2020, it has signed three trade agreements: with Australia (in 2021), New Zealand (in 2022) and an agreement with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in July 2023. This is the first time the UK has walked away from trade talks since Brexit and some observers comment it points to the difficulties the UK will have in making trade deals with other countries. Canada should have been – given the commonality of King Charles III as their shared Head of State – a relatively easy country for the UK to do business with.

A spokesperson for the UK government said, “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.”

As of 2020, the trading relationship between the UK and Canada was valued at £19.2bn, with UK imports from Canada worth £7.3bn and UK exports to Canada worth £11.8bn, according to the UK government.

Canada and the UK have been operating under a continuity agreement, which came into force in April 2021 and preserves the main benefits of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA). There was a time limit on how long certain tariffs would be suspended, and those limits are now coming to an end. From the start of this year, Canada has imposed a 245% import tax on cheese, which has had a massive impact on UK cheese exporters – such as Coombe Castle International, the largest UK cheese exporter to Canada, which sees a third of its cheese go to Canada – as well as Canada’s cheese importers.

There have also been disagreements about the UK’s refusal to import beef that has been treated with hormones. This has been viewed as a win for British farming, and for the pro-Brexit camp who point out the UK has been able to assert its principles because of its new-found independence.

Minette Batters, President of the National Farmers’ Union of England and Wales (NFU), said: “On products such as beef and cheese, Canada was demanding too much and offering too little, therefore preventing progress to the benefit of both countries.”

On the other side, however, the unwillingness to accept Canada’s food safety rules is viewed as the UK blocking access to its market.

Nathan Phinney, the President of the Canadian Cattle Association, said: “Until the UK barriers to Canadian beef are resolved, Canadian producers will continue to be at a disadvantage. The UK currently has unlimited access for British beef exports to Canada while Canadian beef producers are unable to export into the UK market.”

There has been an agreement in place on automotive products, which, when it ends in April 2024 is likely to see a similar hike in import taxes. Canada is not a major auto exporter, and so it is the UK’s automotive sector that will suffer the impact.

Despite the clamouring of voices describing the suspension in talks as disappointing, both sides have said they are willing to restart the negotiations in the future.