On Sunday, Canada\u2019s Prime Minister Mark Carney and British Prime Minister Keir Starmer agreed<\/a> to set up a working group to figure out how to expand their economic relationship into new areas, including digital trade, and to tackle barriers to market access. The U.K. is Canada\u2019s third-largest trading partner and yet the volume of goods exchanged by the countries is relatively small. About 3.6 per cent of Canada\u2019s exports went to the U.K. in 2024, while the U.K. made up just 1.2 per cent of Canada\u2019s imports.\u00a0<\/p>\n That would essentially revive stalled trade talks between the two Commonwealth allies. Canada and the U.K. struck a temporary bilateral deal after Brexit severed the U.K. from the Canada-European Union Comprehensive Economic and Trade Agreement (CETA). The provisional deal<\/a> reached in 2021, which is still in effect, eliminates about 99 per cent of the tariffs on Canadian exports to the U.K. covered by CETA. One difference is that it let British cheese be sold duty-free in Canada\u2019s supply-managed dairy market until the end of 2023. Talks for a permanent pact broke off<\/a> in January 2024 due to the impasse over cheese and a U.K. ban on hormone-treated beef.<\/p>\n \t\t\t\t\tRelated Articles<\/p>\n \t \t A lot has changed since then.\u00a0<\/p>\n U.S. President Donald Trump began his trade war with tariffs on Canada, Mexico and China, and then took aim at other countries, including the U.K., with so-called reciprocal tariffs in April. On the sidelines of the G7 summit on Monday, Trump and Starmer firmed<\/a> up some details of the entente they reached<\/a> last month. The U.S. is exempting British aerospace parts and allowing up to 100,000 British cars to enter the U.S. with a 10 per cent duty instead of 27.5 per cent. A 10 per cent baseline tariff remains on all other goods, while an an earlier promise to exempt British steel and aluminum from 25 per cent tariffs is still being negotiated.<\/p>\n \t\t \tBritish High Commissioner Rob Tinline. Photo:<\/strong> Instagram\/Screengrab\t<\/p>\n Meanwhile, Canada and the U.K. have elected new prime ministers who are looking to expand trade beyond the U.S. As Tinline noted, neither was involved in the two countries\u2019 earlier round of bilateral negotiations, nor the decision to suspend them. \u201cWe will have to have those conversations to see if there is a landing point on some of those difficult agriculture and food issues,\u201d Tinline said.<\/p>\n The joint statement from Carney and Starmer, who spent time together in Ottawa this weekend before the G7 summit, did not guarantee they would overcome those stumbling blocks. The countries will, however, agree to co-operate in the meantime on artificial intelligence, quantum computing, semiconductors and biomanufacturing, critical minerals and nuclear energy projects.<\/p>\n The \u201cgrowth and innovation partnership\u201d includes $14.8 million to support joint Canada-U.K. research and development in biomanfacturing\u2014such as vaccines\u2014and a pledge to develop secure transatlantic quantum communications. \u201cThere are a whole range of partnerships that were threaded through that statement, where the U.K. and Canadian industries are complementary, where our researcher and innovation funding agency is already funding collaborations and is looking to fund more collaborations\u2014where we can be more effective together,\u201d Tinline said. \u201cIt\u2019s a way of trying to make sure that we\u2019re linking up the right institutions in the U.K. and Canada to make sure that it works for both of us and drives more innovation.\u201d<\/p>\n \u201cNobody in NATO wants a position where every country is building its own tank.\u201d<\/p>\n Toronto-based artificial intelligence firm Cohere, whose CEO Aidan Gomez met<\/a> Carney and Starmer in Ottawa on Sunday, is part of that plan. A memorandum of understanding<\/a> between Cohere and the U.K. government says they will explore \u201cambitious, safe, and responsible adoption of AI in defence contexts.\u201d That could involve using AI for training and development, the memo says, as well as \u201cinforming the development of policy positions.\u201d<\/p>\n Tinline said the U.K. government, which is already using Cohere tools in some areas, wants to boost efficiency in the public sector. An AI-powered multi-language translation tool, he said, could help with policing in situations when people are using slang or speaking foreign languages. \u201cYou can allow policing to be more effective, because you can process data in different languages much more quickly to give police officers what they need,\u201d he said.<\/p>\n Canada and the U.K. can also help each other out in defence industries, Tinline said. He recently visited the Irving Shipbuilding site in Halifax where the new River-class destroyers<\/a> are being built for the Royal Canadian Navy. The design is based on that of the Type 26 frigate by British military firm BAE Systems<\/a>, which Tinline says helps bring down the cost.<\/p>\n
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