A top Canadian diplomat has disputed a claim by business and trade secretary Kemi Badenoch that trade negotiations between the North American country and the UK are ongoing.
In a letter to the House of Commons business select committee, reported on by the FT, high commissioner to the UK for Canada, Ralph Goodale, has disputed Badenoch’s claim that talks are continuing.
Last month (29 January) Badenoch told MPs that trade talks were “ongoing” with the Canadian government over the rights of UK car manufacturers to export products using EU-made parts to Canada.
Brexit shift
Currently, the two countries trade under an agreement rolled over from before Brexit. The end of the rollover agreement on 31 March will, as things stand, mean the end of preferential terms on rules of origin for products including British cars.
To export to Canada without paying tariffs, car manufacturers need to be able to show that at least 50% of their products’ components are UK-made – but that number can also currently include EU-made components.
EU parts will no longer be admissible as part of the 50% rule at the turn of April, while the percentage is set to rise to 55% in September.
Negotiations for an extension of the rules allowing EU parts have broken down alongside those for an agreement on free trade in cheese between the two countries, as well as for permission for Canadian hormone-injected beef to enter the UK market.
Wheel meet again?
Badenoch said last month:
“This is a good opportunity for me to state explicitly that the talks have not broken down. We are having multiple discussions with Canada on cheese, in which we have not come to an agreement.
“We have an ongoing rules-of-origin discussion, and we have an FTA discussion, which I have paused.”
Yet Goodale’s letter contends that discussions on all trade matters between the two governments have been suspended since last month.
He writes:
“As far as I’m aware, since the UK announced its pause on 25 January, there have been neither negotiations nor technical discussions with respect to any of the outstanding issues — including British access to Canada’s Tariff Rate Quotas for cheese and the approaching expiry of cumulation provisions respecting rules of origin.”
Labour MP Liam Byrne, chair of the business and trade committee, suggested Badenoch would have “misled parliament” if trade talks were not ongoing in comments to Politico.
A Department for Business and Trade (DBT) spokesperson responded to the claims of Global Affairs Canada to say that “we disagree with [their] assessment”.
The spokesperson added:
“The talks are paused, but the Canadians understand the need to engage and have been speaking to their counterparts about what would be necessary for formal FTA talks to resume.”
