July 13, 2024

UK faces Brexit realities after failed Canada talks


Trade negotiations between the UK and Canada have hit a roadblock, highlighting challenges in the UK’s quest for new global trade alliances, according to experts on Friday.

Despite London’s efforts to forge new trade agreements worldwide, talks with Ottawa were paused late Thursday, with disagreements over British cheese imports to Canada and Canadian beef exports to the UK cited as major stumbling blocks.

A spokeswoman for Prime Minister Rishi Sunak affirmed the government’s commitment to negotiating deals beneficial to the British people but emphasized the right to pause discussions if progress stalls. While expressing openness to restarting talks with Canada in the future, this development has drawn criticism from the main opposition Labour party, branding it as “another significant failure” by the Conservative government to uphold its promises.

Economics Professor Keith Pilbeam of City, University of London, asserted that the UK’s pro-Brexit stance had been overly optimistic. He argued that the challenges faced in trade negotiations underscored the difficulty of striking deals independently, particularly given the UK’s smaller economy compared to the EU. Despite success in rolling over existing EU deals, the task of negotiating new agreements has proven formidable.

King’s College London economist Jonathan Portes downplayed the direct impact on UK trade with Canada but criticized the broader government strategy. He contended that relying on post-Brexit trade deals to offset negative impacts was never realistic, shedding light on the limitations of the UK’s trade approach.

While some trade deals have been secured with countries like Australia, New Zealand, and Singapore, the sought-after free trade agreement with the United States remains elusive. The failure to reach an agreement with Canada leaves some UK exporters facing challenges, including customs duties of 245 percent on British cheese imports.

As the rules of origin for UK car exports to Canada are set to expire in March, the British Chambers of Commerce warns of potential customs duties of 10 percent. This development further underscores the complexities and consequences of trade negotiations in the post-Brexit landscape.

The failure in talks between two G7 and Commonwealth allies reflects a broader trend of rising protectionism globally, with exporters grappling with the aftermath. While some view the pause as a prudent decision, others, like the president of Britain’s National Farmers Union, Minette Batters, contend that Canada’s demands were excessive.

Trade expert David Henig noted that the UK’s decision to protect food and veterinary standards, following criticism of a previous deal with Australia, reveals the challenges in balancing trade priorities. The realities of negotiations, the need to protect standards, and the necessity of making choices have come to the forefront, signaling a critical phase in the UK’s post-Brexit trade endeavors.

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