"New UK Government Revives Hopes for Canada Free-Trade Deal"

06 Jul, 2024

"New UK Government Revives Hopes for Canada Free-Trade Deal"

The major shift in the British political landscape after Thursday's election is reviving hope for a possible free-trade deal with Canada. Keir Starmer officially became prime minister Friday morning, appointed by King Charles III after Conservative Leader Rishi Sunak stepped down. The British electorate gave Labour a landslide victory with 412 of Parliament's 650 seats, handing the Tories a historic loss. Achim Hurrelmann, a political science professor at Carleton University, said the two countries have maintained strong ties. Despite different party affiliations, the Canadian Liberal party and the U.K. Conservative Party have generally worked well together on international and trade issues. However, talks for a free-trade deal, which began after Brexit, collapsed in January.

Among the critical issues were British cheese exports and Canadian dairy quotas. Martin Buckle, director of the British Canadian Chamber of Trade and Commerce, was surprised when the U.K. government walked away from negotiations. There were also concerns about British rules banning hormone-treated beef from Canada and automotive sector rules of origin.

A continuity agreement keeps most former EU trade rules in place until a separate deal is signed. The U.K. is Canada’s fourth-largest trading partner, amounting to about $45 billion a year. Prime Minister Justin Trudeau congratulated Starmer, expressing hope for concluding the trade deal and strengthening economic ties.

The Labour Party plans to reset international relationships and start inking trade deals without reversing Brexit. While Canada's trade isn’t specifically mentioned, Buckle hopes this reflects a focus on larger concerns with Europe. Hurrelmann doesn’t expect an urgent move to resume talks, noting that underlying issues are non-partisan and unchanged. He suggests that recent political shifts in the U.K. could serve as a cautionary tale for Canadian politicians, particularly for Trudeau’s Liberals, who face growing calls for leadership change.