This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/world/2016/aug/15/brexit-canada-trade-deal-eu-model-next-steps
The article has changed 5 times. There is an RSS feed of changes available.
| Version 1 | Version 2 |
|---|---|
| Canada's trade deal with EU a model for Brexit? Not quite, insiders say Canada's trade deal with EU a model for Brexit? Not quite, insiders say | |
| (4 months later) | |
| It took hundreds of skilled negotiators, dozens of videoconferences and seemingly endless days in Brussels to produce the 1,600-page text. Some seven years after Canada and the EU began negotiating a trade deal, the future of the agreement remains shrouded in doubt. | It took hundreds of skilled negotiators, dozens of videoconferences and seemingly endless days in Brussels to produce the 1,600-page text. Some seven years after Canada and the EU began negotiating a trade deal, the future of the agreement remains shrouded in doubt. |
| But that hasn’t stopped the Comprehensive Economic and Trade Agreement, or Ceta, as Canada’s deal with the EU is known, from being held up as the preferred model for Britain to follow in the wake of the Brexit vote. | But that hasn’t stopped the Comprehensive Economic and Trade Agreement, or Ceta, as Canada’s deal with the EU is known, from being held up as the preferred model for Britain to follow in the wake of the Brexit vote. |
| David Davis, the new minister for Brexit, has called it the “perfect starting point for our discussions with the commission”. Earlier this year, Boris Johnson cited Canada and its trade deal as an example for the UK to follow, adding: “It’s a very, very bright future I see.” | David Davis, the new minister for Brexit, has called it the “perfect starting point for our discussions with the commission”. Earlier this year, Boris Johnson cited Canada and its trade deal as an example for the UK to follow, adding: “It’s a very, very bright future I see.” |
| Those close to the negotiations and others who have followed the development of the agreement paint a more nuanced picture. They point to the years of complex negotiations demanded by the deal and the persistent uncertainty that continues to dog its implementation – and they question whether the agreement’s framework is far-reaching enough to allow the UK to replicate its current level of access to the single market. | Those close to the negotiations and others who have followed the development of the agreement paint a more nuanced picture. They point to the years of complex negotiations demanded by the deal and the persistent uncertainty that continues to dog its implementation – and they question whether the agreement’s framework is far-reaching enough to allow the UK to replicate its current level of access to the single market. |
| “How they think Ceta is the panacea, I’m confused,” said one senior Canadian government official who was deeply involved with the negotiations. “We still don’t get complete access to the EU market the way the Brits currently have as a member state. So I don’t understand this looking towards Ceta as the answer to Brexit when they will be taking a 43-year step backwards in terms of the current access they have to the European Union.” | “How they think Ceta is the panacea, I’m confused,” said one senior Canadian government official who was deeply involved with the negotiations. “We still don’t get complete access to the EU market the way the Brits currently have as a member state. So I don’t understand this looking towards Ceta as the answer to Brexit when they will be taking a 43-year step backwards in terms of the current access they have to the European Union.” |
| The agreement – which has yet to be ratified – promises that around 98.6% of goods traded between Canada and the EU will be free of duty, paves the way for access to public procurement between the two markets and empowers regulatory bodies to accept the standards and tests carried out in each other’s jurisdictions. The trade deal doesn’t heighten access to sensitive agricultural products such as eggs or poultry and keeps quotas – albeit boosting them – in place for tariff-free imports of products such as beef and cheese. While the trade deal aims to liberalise services, hundreds of exceptions are listed. | The agreement – which has yet to be ratified – promises that around 98.6% of goods traded between Canada and the EU will be free of duty, paves the way for access to public procurement between the two markets and empowers regulatory bodies to accept the standards and tests carried out in each other’s jurisdictions. The trade deal doesn’t heighten access to sensitive agricultural products such as eggs or poultry and keeps quotas – albeit boosting them – in place for tariff-free imports of products such as beef and cheese. While the trade deal aims to liberalise services, hundreds of exceptions are listed. |
| Under Ceta, Canada will have no hand in setting EU regulations or formulating product standards and no access to the banking passport system that would have allowed its banks and financial services to trade freely. The freedom of movement clauses are primarily focused on businesspeople. | Under Ceta, Canada will have no hand in setting EU regulations or formulating product standards and no access to the banking passport system that would have allowed its banks and financial services to trade freely. The freedom of movement clauses are primarily focused on businesspeople. |
| Negotiations between Canada and the EU dragged on for years, despite early expectations that they would be completed by 2012. The extended timeline was a reflection of the sheer complexity of the issues being addressed and helped produce a document described by Canada’s trade minister as a “gold standard” deal with the EU. | Negotiations between Canada and the EU dragged on for years, despite early expectations that they would be completed by 2012. The extended timeline was a reflection of the sheer complexity of the issues being addressed and helped produce a document described by Canada’s trade minister as a “gold standard” deal with the EU. |
| “I’m surprised we pulled it off,” said the government source, crediting the political will that came from both sides. | “I’m surprised we pulled it off,” said the government source, crediting the political will that came from both sides. |
| It remains to be seen whether the same spirit of collaboration will colour negotiations between the UK and the EU. “I honestly don’t know how it can be exactly replicated,” said Sylvain Charlebois, a professor at Dalhousie University in Halifax. “Gains are going to be different, stakes are going to be different. And therefore the deal has to be different.” | It remains to be seen whether the same spirit of collaboration will colour negotiations between the UK and the EU. “I honestly don’t know how it can be exactly replicated,” said Sylvain Charlebois, a professor at Dalhousie University in Halifax. “Gains are going to be different, stakes are going to be different. And therefore the deal has to be different.” |
| Some of this lies in the scale of Canada’s trade with the EU. Canada’s largest trading partner is the United States, accounting for more than 60% of its total global trade in 2014. The EU is Canada’s second trading partner, representing around 10% of its external trade. | Some of this lies in the scale of Canada’s trade with the EU. Canada’s largest trading partner is the United States, accounting for more than 60% of its total global trade in 2014. The EU is Canada’s second trading partner, representing around 10% of its external trade. |
| In contrast, the EU is the UK’s biggest trading partner, accounting for 45% of UK exports of goods and services in 2014 and 53% of imports. As Pierre Pettigrew, a former trade minister for Canada, wrote in March in the Times: “It is fatuous to think there is a real comparison between Canada’s relationship with the EU and the UK’s with the bloc. Indeed, were Canada to trade as much with the EU as we do with the US we would want a much deeper relationship than Ceta.” | In contrast, the EU is the UK’s biggest trading partner, accounting for 45% of UK exports of goods and services in 2014 and 53% of imports. As Pierre Pettigrew, a former trade minister for Canada, wrote in March in the Times: “It is fatuous to think there is a real comparison between Canada’s relationship with the EU and the UK’s with the bloc. Indeed, were Canada to trade as much with the EU as we do with the US we would want a much deeper relationship than Ceta.” |
| Pettigrew pointed to the seven years of negotiation that went into Canada’s deal. “When you can rely on trade with the world’s largest economy, as is the case for Canada, you can afford the luxury of time. That will not be the UK’s position.” He estimated it could take up to 10 years for the UK and EU to reach agreements on various arrangements. | Pettigrew pointed to the seven years of negotiation that went into Canada’s deal. “When you can rely on trade with the world’s largest economy, as is the case for Canada, you can afford the luxury of time. That will not be the UK’s position.” He estimated it could take up to 10 years for the UK and EU to reach agreements on various arrangements. |
| The time would likely be spent attempting to reach compromises on the many areas not covered or minimised by Ceta. Canadian exports to the UK and EU are dominated by gold, precious stones and other metals – all products that aren’t produced in large quantities in Europe, Fredrik Erixon of the European Centre for International Political Economy noted in a recent article on Ceta. “For the UK, whose trade with the EU are in sectors highly exposed to regulatory protection (finance, nuclear power equipment, pharmaceuticals, et cetera) it would lead to a serious loss of market access and commercial integration,” he wrote. | The time would likely be spent attempting to reach compromises on the many areas not covered or minimised by Ceta. Canadian exports to the UK and EU are dominated by gold, precious stones and other metals – all products that aren’t produced in large quantities in Europe, Fredrik Erixon of the European Centre for International Political Economy noted in a recent article on Ceta. “For the UK, whose trade with the EU are in sectors highly exposed to regulatory protection (finance, nuclear power equipment, pharmaceuticals, et cetera) it would lead to a serious loss of market access and commercial integration,” he wrote. |
| The task of reaching a compromise within these sectors would fall to the UK’s team of negotiators – many of whom have yet to be hired. The UK government has said it plans to hire up to 300 people after an initial government review turned up just 20 “active hands-on” trade negotiators. | The task of reaching a compromise within these sectors would fall to the UK’s team of negotiators – many of whom have yet to be hired. The UK government has said it plans to hire up to 300 people after an initial government review turned up just 20 “active hands-on” trade negotiators. |
| I honestly don’t know how it can be exactly replicated | I honestly don’t know how it can be exactly replicated |
| These negotiators will also have to decide whether to push forward with some of Ceta’s more thorny clauses, such as that which allows corporations to launch legal challenges against governments perceived to block them. “That’s a real threat,” said Andreas Schotter, a professor at Western University’s Ivey School of Business in southern Ontario. “That’s what the person in the street doesn’t understand, that with the legislation that is behind these trade deals, corporations become powerful enough to sue governments.” | These negotiators will also have to decide whether to push forward with some of Ceta’s more thorny clauses, such as that which allows corporations to launch legal challenges against governments perceived to block them. “That’s a real threat,” said Andreas Schotter, a professor at Western University’s Ivey School of Business in southern Ontario. “That’s what the person in the street doesn’t understand, that with the legislation that is behind these trade deals, corporations become powerful enough to sue governments.” |
| The clause could leave the UK fending off the same sort of challenge to its sovereignty that many in the Leave camp had hoped to avoid by leaving the EU, he said. “They don’t want to have German corporations start suing the UK government for not giving access to certain areas in the market or not giving certain incentives or certain aids.” | The clause could leave the UK fending off the same sort of challenge to its sovereignty that many in the Leave camp had hoped to avoid by leaving the EU, he said. “They don’t want to have German corporations start suing the UK government for not giving access to certain areas in the market or not giving certain incentives or certain aids.” |
| Ironically, the same voices which laud Ceta as a model to be followed have helped cast doubt on when – and whether – the trade deal between Canada and the EU will come into force. Recently, the European Commission backed away from a plan that would have sped up the adoption of the deal, saying it would instead send the text to the EU’s 28 national parliaments, as well as some regional parliaments, to be ratified. | Ironically, the same voices which laud Ceta as a model to be followed have helped cast doubt on when – and whether – the trade deal between Canada and the EU will come into force. Recently, the European Commission backed away from a plan that would have sped up the adoption of the deal, saying it would instead send the text to the EU’s 28 national parliaments, as well as some regional parliaments, to be ratified. |
| The Canadian government hopes to have the agreement in force by early 2017, said Greg Tereposky of Borden Ladner Gervais, a law firm that represented various private sector companies during the negotiations. “I don’t think that’s possible … We don’t know how the UK will fit into this puzzle, ultimately.” | The Canadian government hopes to have the agreement in force by early 2017, said Greg Tereposky of Borden Ladner Gervais, a law firm that represented various private sector companies during the negotiations. “I don’t think that’s possible … We don’t know how the UK will fit into this puzzle, ultimately.” |
| He pointed to the annual quota set for tariff-free cheese laid out in the trade deal, rising to 18,000 tonnes over a period of six years. “Clearly some of that should be allocated to British blue cheese. The question is, how do you divide that?” | He pointed to the annual quota set for tariff-free cheese laid out in the trade deal, rising to 18,000 tonnes over a period of six years. “Clearly some of that should be allocated to British blue cheese. The question is, how do you divide that?” |
| Discussions such as these will probably force officials to push back the date of Canada’s trade deal with the EU to the second half of 2017 at the earliest, he said. “These are very complex and potentially contentious negotiations.” | Discussions such as these will probably force officials to push back the date of Canada’s trade deal with the EU to the second half of 2017 at the earliest, he said. “These are very complex and potentially contentious negotiations.” |