The UK has suspended its trade talks with Canada, with the Government warning that Britain "will only negotiate trade deals that deliver for the British people".
The two countries have been in talks about a new trade deal since March 2022.
Since 2020, they have been trading under the terms of a deal the UK rolled over from its time in the EU.
The time-limited deal means the UK was able to sell cars and cheese to Canada without being slapped with high import taxes. But the negotiations to extend this agreement have now been suspended after the two nations were unable to come to an agreement.
The UK has suspended its trade talks with Canada
PA
The move means that the UK's trading terms with Canada will now be worse than when it was part of the EU's deal. This is the first time the UK has formally suspended trade talks with another country since leaving the bloc.
It means British car companies are now braced for possible higher import charges from April in order to sell to Canada.
Increased tariffs on British cheese had already come into force earlier this month after the previous deal's terms expired at the end of 2023.
The deal is said to have broken down after failing to come to an agreement on a ban on hormone-treated beef. Canada had been pushing for the UK to relax its ban, which Canadian producers argued effectively shuts them out of the UK market.
The Canadian Government had also been facing political pressure from domestic cheese producers.
In 2020, total goods trade between Canada and Britain was worth £19.2bn in 2020, UK Government figures show. Imports from Canada were worth £7.3 billion, while UK exports to Canada were worth £11.8 billion.
Total goods trade between the two countries was worth £19.2bn in 2020, according to the UK government, with UK imports from Canada worth £7.3bn and UK exports to Canada worth £11.8bn.
A spokesperson for Canadian trade minister Mary Ng said the decision to pause talks is "disappointing".
She said: "Their decision to continue to maintain market access barriers for our agriculture industry and unwillingness to reach a mutual agreement has only stalled negotiations," the spokeswoman added. The UK is a long-standing trading partner and I am confident that we can negotiate an agreement that is win-win for Canada and for the UK".
This is the first time the UK has formally suspended trade talks with another country since leaving the bloc
PA
LATEST DEVELOPMENTS:
- Top UN official lashes out at Sunak's 'Stop the Boats' plan dubbing it a 'fake response'
- 'The Tories won't exist by Christmas!' Sunak dealt major blow as No10 pollster quits and issues chilling warning about threat from Farage
- No10 forced to issue statement on conscription after fears of military call up
"But let me be clear - we will not negotiate an agreement that is not good for Canadians - and not good for our Canadian businesses, farmers and workers".
But a spokesperson for the UK Government said Britain has "always said we will only negotiate trade deals that deliver for the British people."
They said the UK Government reserves the right to "pause negotiations with any country if progress is not being made", adding: "We remain open to restarting talks with Canada in the future to build a stronger trading relationship".
A UK government source said: "If Canada comes back to the table with a serious offer and a desire to make progress we're all ears."