Canada Rejects British Attempt To Secure Tariff-Free Exports of Hard Cheese

 

A priceless opportunity to sell “more affordable high-quality cheese to Canada” was one of those many Brexit boons that Boris Johnson championed with his customary blather as prime minister.

A bespoke UK-Canada trade deal was going to open up the Canadian market to cheddar, stilton and wensleydale in a way that had never been possible under a trading agreement struck between the EU and Canada.

But after a meeting in recent days between Britain’s cheese makers and the UK government’s negotiating team there is a whiff to Johnson’s boasts that would put a stinking bishop to shame.

Not only are the British negotiators getting nowhere fast on the terms of a comprehensive trade deal with Canada, but the UK’s attempts to at least extend a rollover of the EU terms of trade on cheese exports have been squarely rejected by their Canadian counterparts

A previous side arrangement, known as the “cheese letters”, maintaining healthy tariff-free export quotas on cheese will come to an end on 31 December without anything tasty to replace it, the government has conceded.

British cheese exports will from 1 January default to the non-EU tariff-free quota, of which about 95% is already spoken for by Norwegian and Swiss producers, among others.

Imports into Canada falling outside that quota will end up being slapped with a 245% duty, making them unaffordable for even the most dedicated fan of artisanal cheese. After months of reassuring words from the trade secretary, Kemi Badenoch, about working on a deal, the government is now advising cheese exporters on how to prepare for the worst.

Darren Larvin, the managing director of Coombe Castle International, based in Wiltshire, said exports to Canada accounted for a third of his turnover.

“We have been trading for 40 years with our trading partner in Canada but it is all at risk”, he said. “The negotiation team’s estimation is that we have reached the end of the road on the cheese extension letters. The door remains open, but it is the team’s estimation that Canada doesn’t want a deal on cheese now.”

Coombe Castle, which received the King’s award for enterprise in international trade in April 2023, has already had to set up a Dutch company in order to sell into the EU and is paying taxes in the Netherlands. “Brexit has not brought any opportunities – no good has come of it,” Larvin said.

Other well-known cheese makers affected by the government’s failure to strike a deal include Neal’s Yard Dairy and the Snowdonia Cheese Company. A 245% duty on cheese imports would add roughly an extra £50 cost to every kilogram of cheese.

Gareth Thomas, Labour’s shadow trade minister, said the government was pricing British products out of business on the global stage.

He said: “It is unacceptable that British cheese exporters are facing unfair price hikes because the government is distracted by its own endless chaos and many will be wondering why on Earth ministers agreed these cliff edges in the UK-Canada trade agreement in the first place.

“This is just the latest in a series of missteps on trade. The government have given away far too much for far too little in trade negotiations, have axed support to businesses to capitalise on trade deals and now seem unable to stop new tariffs hitting top British exporters.”

UK exporters shipped £18.7m worth of cheese to Canada in 2022. During the negotiations over a wider trade deal, the Canadian government had been pushing for the British government to lower its food standards in relation to beef imports but the UK has refused to comply.

Some Canadian buyers have been stockpiling British cheese in the run-up to the deadline but Canadian cheesemongers are expected to run out by spring.

William Bain, the head of trade policy at the British Chambers of Commerce, said: “It will be a worrying festive period for UK manufacturers and exporters of cheese and dairy products to Canada.”

The Department for Business and Trade said: “The UK has a right to access Canada’s dairy market at the WTO. We are in constant discussion with dairy farmers and producers about the potential changes at the end of the year, including ensuring that they have all the information they need to prepare.

“We also continue to talk to Canada about this issue, emphasising UK exports benefit businesses on both sides of the Atlantic, and demand in Canada for British cheese is on the rise, with exports up 11% this year.”