Achi news desk-
LONDON – Britain said on Wednesday that post-Brexit trade arrangements with Canada that allow its carmakers to avoid high tariffs there are likely to expire next week, marking the latest deterioration in trade relations between the historic allies.
Britain and Canada suspended talks over a new free trade agreement in January amid disagreement over Rules of Origin (ROO) arrangements, which were due to expire at the end of March, as well as unhappiness on both sides over a lack of access to agricultural markets.
On Wednesday, Britain said Canada had decided not to roll over the Rules of Origin arrangements it had agreed upon when it left the European Union, terms used as a stopgap while the two sides try to agree a full trade deal.
Under the terms, both sides agreed that UK goods that used inputs from either the EU or were processed in the bloc should count as UK-made goods and therefore qualify for lower tariffs in Canada. An end to the agreement could leave automakers that do not meet the new ROO requirements facing a 6.1 percent tariff in Canada.
“Canada’s decision not to pass on these Rules of Origin will increase the cost of trade and hurt businesses on both sides of the Atlantic,” said a spokesman for Britain’s Department of Business and Trade.
“The UK government remains prepared to work with Canada to find a solution that works for both countries, but we will not accept a back row on the current terms.”
Canada’s commerce ministry did not respond to a request for comment.
British car exports to Canada were worth almost 700 million pounds (US$883.68 million) in 2023. The Association of British Motor Manufacturers and Traders said new tariffs would be deeply disappointing.
“We urge all parties to be pragmatic, to resume negotiations on an upgraded trade deal and, in the meantime, to agree to extend the EU’s build-up that would avoid the imposition of tariffs until a new deal is finalised, ” said SMMT Chief Executive, Mike Hawes. .
At the end of 2023, Britain rolled out similar ROO arrangements with South Korea and Mexico.
Britain and Canada, both members of the Commonwealth and the G7, are allies with close historical ties. But negotiating new trading terms has brought their competing interests to the fore.
Britain’s sensitivity to hormone-treated Canadian beef and a spat over cheese quotas had marred talks over a new free trade deal.
A UK government source said that the government had been trying to find an agreement with Canada over ROO for several months but that Ottawa had shown “no willingness” to agree to an extension.
