Reports have not been exaggerated, Chequers is dead. Dominic Raab and Theresa May are doing their very best to prop it up, but the whole thing is a farcical pretence. Look closely enough and you can see they’re dragging along a corpse, it’s like a bad ‘Weekend at Bernie’s’ remake.
Meanwhile, the EU’s opening offer of a Free Trade Agreement (FTA) still lingers on the table and many Brexiteers are urging Theresa May to pick it up and run with it. The proposed deal includes tariff and quota-free trade, basic provisions for services and add-on agreements covering defence, security and policing. So, is the ‘Canada option’ the best way forward now and does it achieve the government’s aims?
Its advocates use various adjectives to describe the deal they want, ‘big’, ‘bold’, ‘ambitious’, to name a few, but they ring hollow because the reality is that is that a “super” Canada style deal is still just a mere FTA, which is a very basic treaty relative to the Single Market. There is little doubt that the UK and the EU could negotiate the best FTA that’s ever been negotiated, but due to the nature of FTA’s it would still be only marginally better than the second best.
An FTA is a treaty governed by specific WTO rules and within this framework there is only so comprehensive it can be. Due to clauses within its other FTA’s, the EU is restricted in the preferential treatment it can offer the UK because its other trade partners would be likely to raise disputes and seek the same privileges.
三级成人视频This means no matter how good the agreement it is, it will still represent a massive downgrade in our trade relationship with our most important partner.
Under this scenario trade would no longer be free-flowing, thus the dreaded backstop would come into play. Northern Ireland would remain in a common regulatory area and a customs union, effectively being annexed by the EU.
This problem arises because the free movement of goods and services is achieved by common rules underpinned by a robust institutional framework. The Canada model is far more basic and thus would mean an increase in technical barriers to trade and consequently increased border inspections, hence the backstop would be applied to avoid a hard Irish border.
三级成人视频This would be disastrous for the Union and terrible for the Northern Irish economy. Considering the rest of the UK is by far Northern Ireland’s most important trading partner, it’s imperative it remains in the UK single market.
三级成人视频Leaving the Single Market in favour of an FTA means more bureaucracy and red tape for British exporters of goods, but it’s even worse for exporters of services. A CETA style deal will be very limited in terms of the liberalisation of services which account for 80 per cent of the UK’s economic output.
There is a range of important services that CETA does not include and, crucially, it falls woefully short on financial services. The City will lose its passporting rights which allows British financial services companies licensed by the UK to operate throughout the EU without setting up subsidiaries.
三级成人视频The Canada option fails to play to our economic strengths and it aggravates our weaknesses. The British service sector enjoys a services trade surplus with the EU of £13 billion and the EU buys over a quarter of British financial services exports; this option simply will not work for us.
It’s no wonder the EU is perfectly happy for the UK to pursue the Canada option, it’s a great deal for the EU but a bad deal for the UK. Think about it, the UK has a trade deficit in goods with the EU of a year, this its main strength. The EU would benefit from exporting goods into the UK tariff-free but British exporters of services would find access to the European market severely restricted. How is this a good deal?
三级成人视频On day one of Brexit, UK regulations will still be aligned with the EU, but the difference is that after Brexit we must prove conformity, hence friction at the border. The tradeoff, CETA+ advocates argue, is that because it doesn’t lock us into regulatory alignment the ability to diverge will pay dividends.
三级成人视频They will argue that EU regulation harms the British economy and hinders our industry but will conspicuously fail to name specific examples of when this has happened and when this will happen in the future. It is also belied by the repeated findings of surveys which that most British companies will continue to comply with EU regulations as they believe the benefits of this far outweigh the supposed benefits of divergence.
The actual feasibility of regulatory autonomy is doubtful, for many industries – from telecommunications, to the automotive and aerospace sectors - it simply makes no sense whatsoever. Moreover, it makes little sense for the British economy as a whole because reduced access to the market where 43% of our exports go is a disadvantage that will not be compensated for by regulatory freedom.
三级成人视频In any case, regulatory autonomy would exist more in theory than in practice. Sam Lowe, Senior Research Fellow at the Centre for European Reform, argues that the supposed big prize of the Canada option is an illusion:
‘The regulatory gravity exerted by the behemoth on our doorstep would see the UK, at the behest of its businesses, remain broadly aligned with the EU’s standards and regulations in many areas so as to avoid duplication and minimise business costs associated with servicing divergent markets.’
CETA represents an enhancement of the trade relationship between Canada and the EU, but a big step down for the UK. It’s a poor deal on trade and offers very little across other areas like aviation and membership of vital EU agencies. Replicating this model is unambitious, we can do far better.
So far, all the talk has been of the Canada option, the Norway option, the Swiss option and so on. None have gathered enough support to make a real breakthrough. It’s time to concentrate on developing something new, unprecedented and better; the British model. A dynamic and truly ambitious Association Agreement fully tailored for the unique partnership between Britain and the EU encompassing a Deep and Comprehensive Free Trade Area and wide ranging political cooperation. This is the best route to reforming this vitally important partnership for the future.