Less than six months until planned end to trade talks, U.K. asks Canada for cheese access extension

With 22 weeks to go until the self-imposed, non-binding deadline to complete a Canada-U.K. comprehensive trade deal comes due—and with a temporary fix set to expire at the end of the year—London is seeking an extension to continue importing cheese to Canada under European Union quotas. Following the completion of the Canada-U.K. Trade Continuity Agreement (TCA), the two sides agreed to “strive to conclude negotiations” on a trade pact that is “ambitious, modern, and comprehensive” within three years of the agreement coming into force, which would be on April 1, 2024. Trade under the transitional pact—which rolled over the coverage that Canada and the United Kingdom had through Canada’s free trade deal with the European Union (EU) following the U.K’s exit from the union—will continue past the non-binding April 1, 2024, deadline, but a side letter that was struck when the deal was accepted to give the U.K. increased cheese access to Canada is set to expire at the end of 2023. In a side letter to the U.K. High Commission in December 2020, then-deputy minister of international trade John Hannaford declared that the U.K. would have access to the EU’s World Trade Organization (WTO) tariff rate quota (TRQ) until Dec. 31, 2023. A TRQ amounts to the quantity of goods that can be imported while being subject to a lower level of duty (or tariff). Canada’s WTO TRQ for cheese gives an allotment of 69.9 per cent to EU member states, and 30.1 per cent for non-EU member states. Hannaford’s side letter set out that the two sides “shall endeavour to reach an arrangement on cheese” as part of negotiations towards a comprehensive trade pact “no later than June 30, 2023.” That agreement has yet to be reached nearly four months after the prospective timeline. While the U.K. would eventually like to see its cheese access to Canada expand, at the moment, it's looking for Canada to extend the conditions that were agreed to in the side letter. “We need to maintain that access either through a permanent solution, or extend the current arrangement until we get to that, if they take another few weeks date,” said Jennifer Fagan, head of economics and trade at the U.K. High Commission in Canada. “Our position from the beginning is that we want to at least maintain the position that we have on cheese, at a minimum. Our ministers both agreed that this deal would build on what we already have, so for us that is a really clear kind of indication that we should be building and not stepping back,” she said. “We are not asking for new access; we would like more access,” Fagan told The Hill Times. “But in the immediate term, in that short period of an extension, we just want to maintain our current access, and not ask for a greater share of the Canadian market through this extension.” The Hill Times asked both the office of International Trade Minister Mary Ng (Markham–Thornhill, Ont.) and the U.K. High Commission for an interview, but only the High Commission agreed to the request. A spokesperson for Ng said she was unavailable. In a statement, Global Affairs Canada spokesperson Geneviève Tremblay confirmed that the two sides have not reached “an arrangement related to U.K. access to Canada WTO cheese TRQ,” but did not directly answer whether the U.K. request for an extension is being considered by the government. “The terms of the TCA cheese side letters will expire at the end of 2023, and cheese imports originating from the U.K. could then be imported under the non-EU reserve of the WTO cheese TRQ,” Tremblay said. Canadian High Commissioner to the U.K. Ralph Goodale has previously said it's up to the U.K. to negotiate cheese access to Canada with the EU. The Hill Times photograph by Andrew Meade The Liberal government has pledged not to offer any additional dairy concessions in future trade talks. Previously, in 2021, Canadian High Commissioner to the U.K. Ralph Goodale said that London would have to seek preferential cheese access to Canada through negotiations with the EU. Negotiations for U.K. cheese access to Canada could further be complicated as a Bloc Québécois private member’s bill, Bill C-282, seeking to bar any supply management concessions in trade negotiations passed the House of Commons in June with all-party support, and is currently at second reading in the Senate. Fagan said the U.K. is watching Bill C-282 “very closely.” Bloc Québécois MP Simon-Pierre Savard-Tremblay (Saint-Hyacinthe–Bagot, Que.), his party’s international trade critic, said the U.K. should be talking to the EU to gain cheese access to Canada under its WTO TRQ allotment. “It’s a matter of business that concerns only them. It’s a negotiation between the U.K. and ,” he said. “We ceded during the negotiation with . The part that was ceded is already ceded, now it concerns only the U.K. who chose to leave Europe. If they don’t have a deal, well, I would say that is their problem, not ours,” said Savard-Tremblay. He said any request for more cheese access should be rejected by Canada, and added that Bill C-282 should be passed before Canada finalizes a trade pact with the U.K., or any other nation. “I prefer that any other deal with any other country in the world is negotiated after our bill is passed,” Savard-Tremblay told The Hill Times. Dairy Farmers of Canada spokesperson Lucie Boileau said in an email that the lobby group has been “assured” by the federal government that “Canada is steadfast that there will not be additional market access concessions.” International Cheese Council of Canada (ICCC) treasurer Lisa MacNeil, president of food distributor Tree of Life Canada, said the terms of the side letter are still needed since a permanent solution hasn’t been reached. “So, just bloody well extend the cheese letters, please, so that we can have continuity of our business,” she said. The ICCC has been asking the government to extend the side letter to avoid disruptions. MacNeil noted that around 12 months or more are required for planning for future purchases. She said that, right now, the WTO cheese TRQ for non-EU members is 96 per cent utilized. The ICCC is calling for the federal government not to offer any increased access in the overall pool, but to transfer some of the WTO cheese TRQ reserved for EU members to the non-EU allotment. Canada committed to self-imposed finish date, U.K. more flexible With the eighth round of Canada-U.K. trade talks set to take place next month, both sides are suggesting that “steady progress” is being made. “Canada remains committed to the goal of completing Canada-U.K. FTA negotiations by April 2024,” Tremblay said in a statement. Fagan said negotiations are going at the same pace they have always been. “We’ve been meeting every 10 to 12 weeks over the last year and a half, coming on two years,” she said, remarking that the next round negotiations will cover the “breadth of the agreement.” “They are still very much moving forward as we would expect at this stage,” she said. “In the last round, we have been able to start blocking out text and closing chapters, and we expect to do more of that this time. So, we are making progress in narrowing down the areas that require more discussion.” Fagan called the agreed-upon timeline of April, 1, 2024, a “bit of an arbitrary deadline.” “The U.K. and Canada are focused on making sure it’s the right deal, that kind of timeline is still in our sights and thoughts, but the exact date of which we finish it will depend on where we get in the negotiations,” she said. “But they will continue in full steam until we get to that point where we reach an agreement.” Fagan said “progress” is being made across all chapters, remarking that the two sides are largely building on the base that was agreed to in the TCA, but noted there is a new Indigenous chapter. The negotiations have been taking place at the departmental official level, with the Canadian and U.K. trade ministers not being present at the negotiation table since the first round. Typically, the more contentious issues that are left to the end of trade negotiations are only resolved with ministerial intervention. Fagan said it is too early to say whether that will be needed in this case. “It may well be at the end our ministers do need to get together to talk, but it’s just too early to tell. We hope that our negotiators will be able to get to that point in agreement and you don’t intervention,” she said. Savard-Tremblay said given the outstanding issues that still need to be dealt with, he doesn’t foresee an agreement being struck by April. “I would say that I’m not concerned with it because trade is still on,” he said. “We can wait the time that is needed.” A beef over beef With negotiations continuing towards a Canada-U.K. pact, advocates for Canada’s meat industries continue to raise concerns over Canadian beef and pork exports to the U.K. The issue reportedly clouded negotiations between Ottawa and London when the U.K. sought, and eventually received, accession to Canada’s 11-country Pacific Rim trade pact. Implementation of the accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership remains ongoing. At issue are sanitary and phytosanitary measures (SPS) regarding the U.K.'s refusal to accept Canadian safety standards in the processing of meat and the use of growth hormones in exported meat. Canadian Agri-Food Trade Alliance executive director Michael Harvey said the U.K. has been “politicizing” food safety issues. “The politics is just trumping the science on food safety,” he said, remarking that it is an issue that will need to be addressed in negotiations. Harvey added that getting a good deal is more important than sticking with the agreed-upon timelines, remarking that the easiest aspects of the negotiation have been solved, and it’s the contentious issues that remain outstanding. “We think it’s important for the top levels of the Canadian system to really bring up to the U.K. how problematic their position is on food safety,” he said. A U.K. trade official says Prime Minister Rishi Sunak won't alter SPS measures. Photograph courtesy of Wikimedia Commons Tremblay said in a statement that Canada is seeking a “comprehensive and ambitious agreement,” including with regard to SPS. “Negotiators are working closely with Canadian stakeholders from all sectors to ensure that their views are well represented at the negotiating table,” she added. Fagan said U.K. Prime Minister Rishi Sunak has been clear that longstanding food safety standards won’t change. “We will not be changing our SPS standards for a trade deal, and we’ve been very clear on that from the very beginning,” she said. nmoss@hilltimes.com The Hill Times EDITOR'S NOTE: This article was updated on Oct. 25 to further clarify food safety concerns that prevent Canadian meat exports to the U.K.

Less than six months until planned end to trade talks, U.K. asks Canada for cheese access extension

Canada and the U.K. were supposed to 'endeavour' to reach an 'arrangement' on cheese by the end of June, but an agreement has yet to be finalized.

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Less than six months until planned end to trade talks, U.K. asks Canada for cheese access extension

Canada and the U.K. were supposed to 'endeavour' to reach an 'arrangement' on cheese by the end of June, but an agreement has yet to be finalized.

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