Prime Minister Mark Carney and U.K. Prime Minister Kier Starmer met in Ottawa on Sunday ahead of the G7 summit in Alberta.Patrick Doyle/Reuters
Canada and Britain have agreed to resume stalled trade negotiations as both countries look to shore up their domestic industries and diversify their foreign markets in the face of U.S. protectionism.
After a meeting in Ottawa on Sunday, Canadian Prime Minister Mark Carney and British Prime Minister Keir Starmer said they would establish a new working group to look at ways to deepen trade ties between the two countries and address some of the irritants that led to a breakdown in bilateral free-trade talks last year. The group has been told to report back in six months.
Mr. Carney also said he would put forward legislation by the autumn to ratify Britain’s accession into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a 12-country free-trade bloc that includes Canada. Britain formally joined the CPTPP late last year, but Canada has not yet signed off on its entrance into the agreement, meaning the CPTPP rules don’t yet cover trade between the two countries.
British Prime Minister Keir Starmer met with Prime Minister Mark Carney in Ottawa before leaving for the G7 leaders' summit in Alberta
The Canadian Press
Mr. Starmer stopped in Ottawa over the weekend on the way to the G7 leaders’ summit in Kananaskis, Alta., where the impact of U.S. President Donald Trump’s trade war is expected to dominate bilateral meetings on the sidelines of the summit. Mr. Carney is scheduled to meet with Mr. Trump Monday morning.
“The world has changed when it comes to trade and the economy,” read a statement released by Mr. Starmer’s office on Sunday. The British Prime Minister “wants teams to go as far and as fast as possible, because it is in all of our interests to lower trade barriers with our closest partners.”
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Canada and Britain have been working toward a new free-trade deal since the country left the European Union in 2020, meaning it was no longer covered by the trade agreement Canada signed with the EU in 2017.
The two countries signed an interim “continuity” agreement in 2021, which allowed most goods to continue trading tariff-free. But efforts to secure a full free-trade agreement were scuttled last year over disagreements on both sides over market access for agricultural products.
British cheese makers want more access to Canada’s supply-managed dairy market, while Canadian farmers want to be able to sell genetically modified beef in Britain.
“Canada has always remained at the negotiating table and we welcome the U.K.’s openness to resume talks,” Huzaif Qaisar, press secretary for Canadian International Trade Minister Maninder Sidhu, said in an e-mail.
“Canada and the U.K. share a strong and historic trading relationship, with 99 per cent of our current trade flowing tariff and quota free under the Trade Continuity Agreement,” he said.
Britain is Canada’s fifth-largest trading partner, with around $38-billion in two-way merchandise trade in 2024, according to Statistics Canada.
Wolfgang Alschner, Hyman Soloway Chair in business and trade law at the University of Ottawa, said disagreements over agriculture may remain a stumbling block for a full Canada-Britain free-trade agreement. “The political economy situation hasn’t changed in relation to these two industries,” he said in an interview.
But there are places where the countries can deepen their trade integration under the auspices of the existing continuity agreement and the CPTPP, especially when it comes to trade in services.
“They just approved the mutual recognition of architects, which is the first profession that has been approved. And so progress has been very slow on getting this mutual recognition done, which then of course impacts services trade. So I think really on the service side, there could be more scope for deepening,” Prof. Alschner said.
Alongside trade discussions, Mr. Carney and Mr. Starmer agreed to work together to support a number of advanced-technology industries, including artificial intelligence, quantum computing and biomanufacturing, and to collaborate on nuclear energy and critical-mineral supply chains.
Aidan Gomez, the chief executive of Canadian AI company Cohere Inc. attended a meeting with Mr. Carney and Mr. Starmer on Sunday, and signed memorandums with both countries.
Under the agreements, Cohere will work with the Canadian AI Safety Institute to build “cutting-edge data centres in Canada” and “expand their UK presence to support the delivery of the UK AI Opportunities Action Plan,” according to a joint statement from the two prime ministers.
“This is personally quite special to me as a son of a Canadian father and British mother,” Mr. Gomez said in a brief appearance with Mr. Carney and Mr. Starmer. “Cohere is excited to strengthen the innovation of both of our countries, as well as the sovereignty.”
The two leaders also discussed defence and security issues, including the conflict between Israel and Iran, according to a readout.
The leaders agreed to continue supporting Ukraine’s defence against Russian aggression, and work together on a number of defence initiatives. This includes “a new permanent arrangement” for British army training programs based at CFB Suffield in Alberta.