The election of a new Labour government in Thursday’s British election may bring with it the promise of change in the U.K., but the immediate impact on relations with Canada is less clear.
The Canada-UK relationship, though typically strong, has faced some hurdles this year. The recently defeated Conservative government unilaterally suspended trade negotiations with Ottawa in January and, more recently, has put renewed pressure on NATO allies (including Canada) to continue increasing their defence spending.
In the short term, those tensions may continue, analysts say, although shared priorities between Labor and the Liberals could lead to an easing in the future.
“It’s probably safe to assume that we won’t see much progress in resolving those issues until the election-related issues are behind us,” said Ann Fitz-Gerald, director of the Balsillie School of International Affairs and professor of political science at Wilfrid Laurier University.
Canada regularly boasts of its strong ties with the UK, particularly as a member of the Commonwealth and a major trading partner. Last year, bilateral trade was worth $45 billion, according to the Canadian government, making Britain Canada’s fourth-largest trading partner.
The two countries have been negotiating a new trade deal for the past two years since Britain fully left the European Union. That agreement would replace the current pre-Brexit Canada-UK Trade Continuity Agreement that has largely allowed goods to continue to flow.
One recent exception is British cheese. Tariff-free cheese exports from Britain stopped at the end of 2023 after a time-limited side deal expired, leaving British producers facing higher tariffs of 245 percent.
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Hopes for resolving that and other issues were dashed in January when the British government announced it was halting trade talks, saying “no progress was being made.”
Access to the Canadian cheese market was a sticking point in the negotiations, which were about to enter their ninth round before London called them off. Another was Britain’s policy of banning imports of meats treated with certain hormones that are widely used by Canadian ranchers, which has hurt Canadian beef and pork exports.
While the British government insisted at the time that it “remains open” to resuming talks in the future, negotiations remain stalled. Meanwhile, another temporary agreement on country of origin rules expired at the end of March.
The change means that EU components in British products are now counted as UK goods within certain quotas. For example, British cars imported into Canada now face an additional 6.1 per cent tariff if more than 50 per cent of their parts come from the EU. That proportion will be reduced to 45 per cent in September.
A spokesperson for Global Affairs Canada said negotiators “stand ready to engage with our U.K. counterparts once they are ready” after Thursday’s election.
“Canada will only negotiate a deal that delivers results for Canadian businesses, farmers and workers,” Charlotte MacLeod said in a statement.
Fitz-Gerald says Labor’s more progressive, worker-friendly economic policies can align the new government with the Liberals and create a path to a deal. But she notes that both the U.K. and Canada face cost-of-living crises and other economic hurdles, making it crucial for each side to strike a deal that benefits consumers.
“Whatever the outcome, one would like to think that with the regulatory and tax systems in both countries the outcome will not burden the individual consumer enormously more than the burdens they are already facing,” he said.
Pressure and compatibility in defense
The British election comes less than a week before NATO leaders meet in Washington for their annual summit, which will mark the 75th anniversary of the defence alliance.
At the summit, allies that currently fall short of the alliance’s threshold of spending at least two percent of GDP on defense (including Canada) are expected to present detailed plans for how and when they will achieve this.
Canada’s updated defence policy only includes explicit spending plans to reach 1.76 per cent by 2030, but the government has promised additional spending beyond that.
In May, then-British foreign secretary David Cameron said the NATO threshold should be raised to 2.5 percent. That pressure may not ease under the leadership of the Labour Party, which has pledged to set out a path to reach that figure.
Labour has also said it will remain committed to AUKUS, the new security alliance between Britain, Australia and the United States signed last year. Canada was left out of the pact despite its links to all three countries under the Five Eyes intelligence alliance.
However, there is potential for additional defence partnerships between Canada and the UK in areas such as Arctic security, cybersecurity, defence production and higher education that will be mutually beneficial to both countries, Fitz-Gerald says.
“We have very similar ideas and face very similar challenges,” he said.
“Here we have the opportunity to specialize in certain areas and team up with like-minded partners… and seek greater complementarity in what we bring to the world, rather than duplication and competition.”
—with files from The Canadian Press and The Associated Press
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