UK’s Kemi Badenoch challenged over Canada trade claims

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LONDON — Business Secretary Kemi Badenoch faced pressure in the U.K. parliament Wednesday after Canada challenged her claim that talks to avert a cliff edge for British car exports are still “ongoing.”

Under the U.K.’s current trade continuity deal with Canada, rules of origin giving British manufacturers the right to use EU parts in their exports without penalty expire on April 1.

It’s prompting major uncertainty for carmakers. British car exports to Canada alone are worth upwards of £700 million annually.

But Badenoch — who walked away from negotiations on a trade deal with Canada amid a row over food standards — told MPs late last month that she could “state explicitly that the talks have not broken down” and discussions on the rules of origin issue were “ongoing.”

Canadian officials subsequently pushed back, telling POLITICO in January “there has been no discussion separately on rules of origin.”

That claim was bolstered in a letter sent by Ottawa’s top diplomat in the U.K., Ralph Goodale, to the chair of the Commons business and trade committee, Labour MP Liam Byrne, which was published on Tuesday.

Goodale said there had been “neither negotiations nor technical discussions with respect to any of the outstanding issues.”

Byrne raised the issue in a point of order in the House of Commons on Wednesday.

“How do we get to the bottom of whether these trade talks are going on in the secretary of state’s mind or whether they’re happening in real life?” he asked.

Badenoch “told the House she was having multiple discussions, these are different from negotiations or technical discussions (as described by Goodale),” a spokesperson for the Department for Business and Trade said. “She has remained in contact with her Canadian counterpart.”

Next week Badenoch will travel to a World Trade Organization conference in Abu Dhabi “where among her meetings she will be continuing discussions with her Canadian counterpart regarding the cheese and rules of origin issues,” the spokesperson added.

Analysis by the Department for Business and Trade shows “exporters of automotives, plastics, chemicals and processed food are likely to be impacted” by the looming rules of origin changes, Industry Minister Nusrat Ghani said earlier this month.