{"id":2179,"date":"2018-03-22T08:13:10","date_gmt":"2018-03-22T08:13:10","guid":{"rendered":"http:\/\/blogs.sussex.ac.uk\/uktpo\/?p=2179"},"modified":"2018-07-10T10:42:05","modified_gmt":"2018-07-10T09:42:05","slug":"eu-likely-to-reject-bespoke-canada-trade-deal-for-uk","status":"publish","type":"post","link":"https:\/\/blogs.sussex.ac.uk\/uktpo\/2018\/03\/22\/eu-likely-to-reject-bespoke-canada-trade-deal-for-uk\/","title":{"rendered":"EU likely to reject bespoke Canada trade deal for UK"},"content":{"rendered":"Share this article: <\/em> \"Facebook\"<\/a>\"twitter\"<\/a>\"reddit\"<\/a>\"pinterest\"<\/a>\"linkedin\"<\/a>\"mail\"<\/a>

\"Image\"\"22 March 2018<\/em><\/p>\n

Julia Magntorn is Research Assistant in Economics at the UKTPO and L. Alan Winters CB is Professor of Economics and Director of the Observatory.<\/em><\/p>\n

The European Union is likely to reject a significantly enhanced version of its Canada trade deal for the UK after Brexit.<\/p>\n

Our in-depth analysis<\/a> of the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada concludes that the EU\u2019s commitment to the Single Market is so deeply ingrained that a substantial loosening of the rules for the UK would be politically impossible.<\/p>\n

The EU may agree to some exceptions but these would fall far short of a bespoke deal and would be a poor substitute for the Single Market, say the report\u2019s authors Julia Magntorn and L. Alan Winters.<\/p>\n

In the search for a framework for a future UK-EU trade relationship, CETA has fallen under the spotlight. \u2018Canada plus\u2019 is frequently cited as a model, but it is not entirely clear what this \u2018plus\u2019 should entail.<\/p>\n

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Our latest briefing paper<\/a> provides an overview of the extent to which the EU restricts imports of services from Canada under CETA. Thus, the authors identify areas where \u2018pluses\u2019 may help to preserve existing levels of services trade between the UK and the EU post-Brexit.<\/p>\n

The research reveals that, following CETA, some services sectors are relatively open to imports from Canada but that, equally, some sectors important to the UK – such as financial services and transport services – remain significantly restricted. The sectors in which trade is unrestricted are those for which the EU market is pretty much open to anyone, and the sectors where trade is restricted are those for which the EU restricts most imports. That is to say, while CETA offers some improvements on market access for Canadian services providers, it does not change the pattern of EU services restrictions fundamentally.<\/p>\n

Insurance, pension and financial services combined accounted for the largest share of UK services exports in 2015. This sector is one of the most restricted in CETA, with considerable limitations on cross-border trade. Recreational and cultural services, as well as transport services, are also among the most restricted. These are some of the areas in which the UK government should be seeking \u2018pluses\u2019.<\/p>\n

Julia Magntorn said:<\/p>\n

\u201cIt is clear that some sectors such as financial services, transport services and certain business services would benefit from \u2018pluses\u2019 and, as such, they could be a good place to start negotiations. However, even an ambitious CETA+++ would not support existing levels of services trade between the UK and the EU, because it would lack the critical overarching features of the Single Market such as the Court and the freedom of movement of people.\u201d<\/p><\/blockquote>\n

The UK starts much closer to the EU than Canada \u2013 both physically and in regulatory terms \u2013 and so the EU may be more likely to agree a deeper level of integration with the UK than it offered in CETA. For example, on data protection and exchange and financial services.<\/p>\n

But a bespoke deal is not likely to be achievable. The EU genuinely believes that countries are either in or out of the Single Market, even if it grants a few derogations from the rules to members and gives some non-members member-like market access in a few cases.<\/p>\n

Professor Winters, Director of UKTPO, said:<\/p>\n

\u201cThe UK\u2019s desired half-in half-out agreement is not on the EU\u2019s to do list. The UK may well achieve a little more flexibility than Norway or a few more concessions than Canada, but it will have to be understood as a series of small exceptions, not a fundamentally different \u2018bespoke\u2019 deal.\u201d<\/p><\/blockquote>\n

An additional obstacle is the fact that any CETA+ commitments on services that the EU makes to the UK will also have to be extended to Canada \u2013 via the so-called Most Favoured Nation Clauses.<\/p>\n

CETA offers a range of appealing aspects, such as a near 99% removal of tariffs on goods and an aim of closer co-operation in areas such as regulation, conformity assessments and standards. At the same time, Canada retains power over its laws and sovereignty over its external trade policy, satisfying two of the UK government\u2019s \u2018red lines\u2019. However, for the reasons given above, the EU is likely to reject a CETA+++ deal and, in any case, it would be a poor substitute for the Single Market.<\/p>\n

 <\/p>\n

Disclaimer:<\/span><\/em><\/p>\n

The opinions expressed in this blog are those of the author alone and do not necessarily represent the opinions of the University of Sussex or UK Trade Policy Observatory.<\/span><\/em><\/p>\n

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The UK Trade Policy Observatory\u00a0believes in the free flow of information and encourages readers to cite our materials, providing due acknowledgement.\u00a0For online use, this should be a link to the original resource on our website. We do not publish under a Creative Commons\u00a0license. This means you CANNOT republish our articles online or in print for free.<\/span><\/em><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Share this article: 22 March 2018 Julia Magntorn is Research Assistant in Economics at the UKTPO and L. Alan Winters CB is Professor of Economics and Director of the Observatory. The European Union is likely to reject a significantly enhanced version of its Canada trade deal for the UK after Brexit. Our in-depth analysis of the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada concludes that the EU\u2019s commitment to the Single Market is so deeply ingrained that a substantial loosening of the rules for the UK would be politically impossible. The EU may agree to some exceptions but these would fall far short of a bespoke deal and would be a poor substitute for the Single Market, say the report\u2019s authors Julia Magntorn and L. Alan Winters.<\/p>\n","protected":false},"author":213,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[129970,130195],"tags":[136656,136303,123536,123537,123581],"_links":{"self":[{"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/posts\/2179"}],"collection":[{"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/users\/213"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/comments?post=2179"}],"version-history":[{"count":8,"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/posts\/2179\/revisions"}],"predecessor-version":[{"id":2479,"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/posts\/2179\/revisions\/2479"}],"wp:attachment":[{"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/media?parent=2179"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/categories?post=2179"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/tags?post=2179"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}