EU–UK trade negotiations: learning from the Canadian agreement
By David Wood, Senior Policy Director
6 February 2020
David Wood highlights the relevance of ICAS’ expert report CETA: Brexit and Beyond for the UK–EU trade negotiations starting in March 2020.
ICAS commissioned and published an expert report CETA, Brexit and Beyond: The Canadian experience with the Comprehensive Economic and Trade Agreement and its usefulness as a model for Brexit in 2017. This has suddenly become hugely relevant again as the UK embarks on its negotiations of a trade deal with the EU over the remainder of 2020.
The report considered the extent to which the Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU could provide a blueprint for EU-UK discussions.
ICAS commissioned the report from Dr James Ogilvy, a former member of the Canadian International Trade Tribunal and an adviser to the Government of Alberta during the CETA negotiations.
The original article on the report by David Wood and Rob Outram, former editor of The CA Magazine, is also available. It provides a summarised commentary on the key points in the report, including further details on the following:
- The CETA is the most current and advanced trade accord in which the EU participates.
- The UK and Canada start from very different positions but the CETA could be a useful comparator, an indicator of the EU’s preferences and sticking points, and a guide to those areas that will require extra effort to achieve the best solution for the UK
- Trade negotiations are complex and can often take years. The UK will face two potential disadvantages – huge time pressure as the end of the transition period approaches and a relatively inexperienced team of trade negotiators compared with the EU.
- CETA reduced or eliminated tariffs for Canada–EU trade to a huge extent, but no better than the UK already benefits from under its transitional arrangements.
- For the UK, the simplest possible rules of origin are needed; for example, for highly integrated sectors such as the automotive industry using ‘just in time’ supply chains.
- Non-tariff barriers which can apply to both goods and services and form significant impediments to trade – often in the form of technical requirements, regulations and standards, and conformity assessment procedures.
- CETA achieved reciprocal privileges for professionals and businesspeople to move between the EU and Canada on a temporary or sometimes visa-free basis. With the UK being so much closer to the EU geographically, the UK will probably wish to go beyond CETA.
- CETA opens up both EU and Canadian markets to the reciprocal provision of services – using a ‘negative list’ approach under which services are included within the scope of the agreement unless specifically excluded. The UK will want to go beyond CETA to meet the needs of the UK service sector and especially for financial services.
- CETA creates a new independent dispute settlement body to deal with investor-state disputes. Given the UK’s concerns about the jurisdiction of the European Court of Justice, this could provide a useful model.
ICAS anticipates that the report will be useful to help the UK Government better plan its discussions with the EU, and thereby facilitate an agreement which meets the needs of both parties within the required timeframe.