Following the government’s claims that they want a ‘Canada-style’ deal, I’ve set out how this would fail to deliver on their promises in The Times today, which you can read below.
A ‘Canada-style’ EU deal falls short of Johnson’s promises
In January, as we left the EU, the Prime Minister told the press that his aim for our future relationship was “a comprehensive free trade agreement, similar to Canada’s.” Given the Government’s track record for competence and attention to detail it will come as no surprise that, when he made those remarks, he either didn’t know what was involved in a Canada-style deal or was being deliberately misleading.
Even as the Government has been ramping up their ‘No Deal’ rhetoric over the last week, they are still claiming they will “work absolutely night and day to get that Canada-style free trade agreement that we seek”. So it is worth looking at how far Canada’s CETA deal with the EU matches Johnson’s objectives for the negotiations.
For starters, having repeatedly rejected Labour’s attempts to secure commitments to workers’ rights and environmental standards in the updated Withdrawal Agreement Bill, Johnson appears not to realise that these obligations are mandatory in the EU’s deal with Canada.
Indeed, CETA doesn’t simply contain multiple chapters on protecting workers’ rights, and maintaining environmental standards, but “prevents either side from relaxing their laws to boost trade”.
However, if this was the only area where Boris Johnson’s rhetoric fails to match the reality of a Canada-style deal, Labour would have no objection to it.
But much more damaging are his entirely false claims that CETA offers frictionless trade outside the Single Market and Customs Union, without committing to any EU rules, and that the EU’s refusal to offer us the same kind of deal is the reason that talks have stalled.
When the detail of CETA is examined, this claim quickly unravels; it’s just another Tory soundbite that falls short of the promises made to businesses, workers and consumers across the UK.
First, the government has been clear that it wants no provisions in its agreement with the EU to establish a level playing field.
Chief Negotiator David Frost explained that “to think that we might accept EU supervision on so-called level playing field issues simply fails to see the point of what we are doing.”
For example, the government has insisted that it wants no external oversight of its state aid rules, despite the UK’s historic state aid spend being a small fraction of France or Germany’s.
However, a ‘Canada-style deal’, would contain not only prohibitions on types of state aid (CETA bans subsidies on agriculture), but also strict conditions on state-owned enterprises and monopolies. Again, CETA does not fit the Government’s description as a simple “no strings attached” tariff arrangement.
Second, to preserve frictionless trade, the Prime Minister has repeatedly committed to a “zero-tariff, zero-quota free trade deal”. However, CETA does not provide that for Canada.
While reducing most tariffs, it maintains strict quotas, and will still require rules of origin declarations, and customs, sanitary and phytosanitary checks on goods. The UK would also require greater access to trade in services than CETA provides; its strict restrictions remaining for sectors such as financial services, would leave the UK losing out.
Therefore, business would still face barriers to trade under this model. At a time when they can ill-afford any additional or compliance costs due to Covid-19’s impact on the economy, this type of arrangement is utterly unsuitable, both for the UK’s needs and for fulfilling the Government’s commitments – while having the potential to cost jobs as the price of doing business rises.
Finally, there is a wider issue behind the Government’s misrepresentation of CETA.
Fundamentally, Canada’s agreement with the EU is based on the premise of aiming for increased convergence over time – a journey towards having more in common, more similar (and higher) standards, and more integration.
Johnson’s aim for the UK’s future relationship with the EU is in an entirely different direction, based on increasing divergence, with Ministers lining up the areas in which they want to depart from our current common standards and practices, not least to negotiate a free trade deal with the US.
Instead of their bluster and untruths about a Canada-style deal, the government must accept that their options have been limited by their own political choices, but leaving with a negotiated deal on the terms promised must remain the top priority. Or it will be back to drawing board again just as time is running out, at huge cost to our economy, jobs and future opportunities.