It seems clear (if anything about Brexit is clear!) that we are going to ask for and get a CETA type free trade deal. David Davis has called for a Canada plus, plus, plus trade deal and Barnier has said a Canada style deal is really the only option, considering the red lines we have set out, so I think CETA is what we are looking at. I should say that nobody who seems to know about these things believes CETA will give us anything like we have at the moment in terms of frictionless trade.
I thought therefore it would be helpful to put a linke to CETA (HERE) in full and also to a summary of it in something called the Joint Interpretative Instrument (HERE). These are not easy documents to read by the way and I don't claim to have done so, but I am interested in the problems the UK might encounter in getting a FTA like CETA. There are several issues with what the UK is attempting.
Other non EU countries with whom the EU have an existing FTA
It will be difficult for the EU to grant any special favours to us because other countries would then question the FTA they have with the EU, as this article makes clear (HERE). Other countries would demand improved terms without the EU being able to demand more in return. And this is if the EU were willing to do it anyway, which they are not. See my post (HERE) also.
We have declared several times that we intend to diverge, yet almost everything in CETA talks of regulatory cooperation (see Chapter 21 starting on page 173) with presumably a view to bringing regulations into alignment. The Joint Instrument talks of creating a platform to allow "better quality of regulation and more efficient use of administrative resources". While full harmonisation is not part of the deal it is clear that this is the aim.
No lowering of standards
The Joint Instrument says, "CETA will also not lower our respective standards and regulations related to food safety, product safety, consumer protection, health, environment or labour protection. Imported goods, service suppliers and investors must continue to respect domestic requirements, including rules and regulations. The European Union and its Member States and Canada reaffirm the commitments with respect to precaution that they have undertaken in international agreements".
This would prevent us lowering standards in all the areas listed and the EU are famous for giving the widest possible interpretation of the definitions so it will severely limit those who want to cut standards. We would effectively be locked into the EU regulations that we have been party to for the last forty years.
And the precautionary principle that John Longworth was so exercised about (HERE) is absolutely enshrined in the agreement - and rightly so.
Frictions to trade
CETA talks about committees set up to resolve issues - "CETA Joint Committee, the Committee on Trade in Goods may also address matters arising in the area of rules of origin, origin procedures, customs and trade facilitation and border measures, sanitary and phytosanitary measures, government procurement, or regulatory cooperation, if this facilitates the resolution of a matter that cannot otherwise be resolved by the relevant specialised committee"
Note how many areas of friction are created. Rules of Origin, Origin Procedures, Border Measures, Sanitary and Phytosanitary Measures, all of which will be introduced and require checking procedures.
This analysis by InFacts of what a CETA style free trade agreement means (HERE) explains some of the problems and shortcomings compared to what we have at the moment. It touches briefly on regulatory standards. They claim Canada is aligning it's regulations in food, chemicals and electrical engineering to EU rules while the EU is changing nothing. The UK like Canada will find the sheer regulatory gravity of the EU and it's internationally accepted standards will be very hard to avoid.
What it doesn't say is that CETA has many references to cooperating on regulatory standards and harmonising these in future. It effectively sets a direction with a known end point - complete harmonisation or to use the current vernacular, full regulatory alignment. But if we are intent on moving in the opposite direction, where do we stop? How much divergence can there be? This is the problem and it has never been attempted before.
In future years the UK will almost certainly be legislating to introduce regulations that align us to the EU but no one will realise this is what is happening if the rules don't mention an EU directive. The right wing press will be satisfied that they are OUR rules but in practice nothing will change. Madness isn't it? We will become a rule taker by stealth.
Update: In spite of it all being carefully explained why a Canada plus deal is simply not available we still get Nick Timothy, May's former aide, saying she should get it (HERE). And the really weird thing is that he doesn't realise this would create a hard border in Ireland which she expressly does not want. To say nothing of the customs checks on trade between the UK and EU that would guarantee friction and drive industry back into continental Europe. Under a Canada style FTA, services that make up 80% of our economy would be excluded from our biggest market.
Update: In spite of it all being carefully explained why a Canada plus deal is simply not available we still get Nick Timothy, May's former aide, saying she should get it (HERE). And the really weird thing is that he doesn't realise this would create a hard border in Ireland which she expressly does not want. To say nothing of the customs checks on trade between the UK and EU that would guarantee friction and drive industry back into continental Europe. Under a Canada style FTA, services that make up 80% of our economy would be excluded from our biggest market.
