What is the EU-Canada trade deal? Will the UK get a Canada-style deal after Brexit?

Posted on Oct 27 2017 - 10:54am by admin

Brexit news: Theresa May and Michel BarnierGETTY

Brexit news: Michel Barnier said the UK could have a Canada style trade deal

As Brexit negotiations grind on in Brussels, Mr Barnier has suggested the UK could adopt a trade deal based on the Canadian model.

In an interview with Germany’s Handelsblatt newspaper, he said that Theresa May has rejected the so-called Norwegian model which allows Norway to trade freely with the EU while accepting all the rules and costs. 

“So we must work on other hypotheses,” he said. “Another option would be a free trade treaty using the example of the CETA agreement with Canada. 

“It would take several years, however, to negotiate such an agreement.”

He confirmed there could not be “a specifically British model” along the lines of the “bespoke arrangements” Mrs May has referred to when discussing Brexit. 

Brussels has made it clear to Mrs May’s Brexit team that Britain will not be given access to the single market unless it retains the free movement of people between EU nations. 

What is the EU-Canada trade deal?

The Comprehensive and Economic Trade Agreement, better known as CETA, is a trade deal between Canada and the European Union.

The deal came into effect on September 21 and will eliminate tariffs on 98 per cent of products travelling between the two parties – a move the EU claims will save Canadian businesses €590million every year. 

Brexit news: Michel Barnier making a speechGETTY

Brexit trade deal: Michel Barnier said the UK will not get any special treatment

European Commission President Jean-Claude Juncker welcomed the deal, saying that it is the perfect example of how the EU wants to conduct deals on the international stage.

It would take several years, however, to negotiate such an agreement

Michel Barnier

He said: “This agreement encapsulates what we want our trade policy to be – an instrument for growth that benefits European companies and citizens, but also a tool to project our values, harness globalisation and shape global trade rules.”

Unlike other deals with non-EU nations, Canada does not have to pay into the bloc’s coffers or accept free movement of people. 

But the deal is far from a comprehensive free trade agreement. There are hundreds of items that are not covered by the policy, including eggs and chicken.  

This means Canada will have to cut through further red tape if it wants to trade freely in these areas. 

CETA also does not offer Canadian business free access to the EU’s service market.

This would be catastrophic for the UK, which relies heavily on selling its financial services on the continent.

CETA, which was signed in 2016, took seven years to complete and EU bosses have warned that the UK faces a similar period of negotiation before any deal can be put in place. 

Canada-EU trade deal: Justin Trudeau GETTY

Brexit news: A trade deal between Canada and the EU came into action last month

Will the UK get a Canada-style deal after Brexit?

A Canada-style trade deal was touted as a solid model for Britain by some Brexiteers in the run up to the EU referendum. But Mrs May ruled out the idea in her Florence speech last month. 

The Prime Minister credited the deal for being the “most advanced free trade agreement the EU has yet concluded” but added that it far more restrictive that the current EU-UK trade deal. 

She said: “But compared with what exists between Britain and the EU today, it would nevertheless represent such a restriction on our mutual market access that it would benefit neither of our economies. 

“Not only that, it would start from the false premise that there is no pre-existing regulatory relationship between us. And precedent suggests that it could take years to negotiate.

“We can do so much better than this.”

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