The UK has stopped its trade talks with Canada, after nearly two years of negotiations on a post-Brexit agreement.
Trade between the two countries currently takes place under the terms of a deal the UK rolled over from its time as an EU member.
A time-limited agreement allowed the UK to continue to sell cars and cheese without high import taxes.
But talks about extending these as part of a new deal have now broken down.
It marks the first time the UK has formally suspended talks with a trade partner since formally leaving the EU trading regime in 2021.
It will also mean the UK’s trading terms with Canada will now be worse than when it was part of the EU’s deal with the country.
British car companies now face the prospect of higher tariffs – import charges – to sell into the Canadian market from the start of April.
Higher Canadian tariffs on British cheese had already kicked in earlier this month, after the previous terms expired at the end of 2023.
Talks between the two countries on reaching a bespoke agreement have been taking place since March 2022.
Canada’s government had been facing political pressure from domestic cheese producers.
It had also been pushing for the UK to relax a ban on hormone-treated beef, which its producers say effectively shuts them out of the British market.
A spokeswoman for Canada’s trade ministerMary Ng said she was “disappointed” at the pause in talks, and had communicated this to UK Business Secretary Kemi Badenoch.
“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”.
“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”.
A spokeswoman for the UK government said it reserved the right to “pause negotiations with any country if progress is not being made”.
“We have always said we will only negotiate trade deals that deliver for the British people,” they added.
“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 table with a serious offer and a desire to make progress we’re all ears”.
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.