Canada EU free trade agreement as Brexit model

This link thinks the Canada EU trade agreement is a good model for Britain in the Brexit.

http://capx.co/10-things-you-need-to-know-about-the-canada-eu-trade-agreement/

As far as I can tell, I was the first person to raise publicly the new Canada-EU Comprehensive Economic and Trade Agreement, or CETA, as a potential template for Brexit, in an article in The Times on January 26th. I have Canadian relatives and lived there for a while, so I keep a fond eye on Canada. I challenged both the Remain and Leave campaigns to look at the deal and explain whether or not it was a useful template for a deal between Britain and the EU if we voted to leave.

Boris Johnson has now taken up the cause and over the weekend specifically cited the Canada-EU deal as a model.

The full agreement and summary is available online and it runs to 1,600 pages. Like the correspondence of Phillip II of Spain, one suspects no single person has read all of it. The main points are pretty clear, but I have to confess that I am not an expert on the all the complexities.

Here are 10 things you need to know:

1. Tariffs

The agreement summary says: “Overall, the tariffs for 98.6% of all Canadian tariff lines and 98.7% of all EU tariff lines will ultimately be fully eliminated. This will happen at entry for 98.2% of the Canadian tariff lines and for 97.7% of the EU tariff lines. All other products identified for liberalisation will have their tariffs brought to zero within 3, 5 or 7 years.”

2. Financial Services

Contrary to the spin from the Remainers, financial services are specifically addressed in Chapter 13 of the agreement. It says that “each Party shall permit a crossborder financial service supplier of the other Party, on request or notification to the relevant regulator, where required, to supply a financial service”. This is a step short of the current “passport regime” under the single market which means an approval by regulators in London is valid across the EU.

A bigger issue is that the EU, led by financial markets commissioner Lord Hill, is about to introduce a Capital Markets Union. This means there will be a single rule book for raising capital across the EU. From the City’s perspective, being left out of this would indeed be disappointing and there is no mention of it in CETA. Except, of course, the bulk of the EU’s capital markets are effectively run from London, so they would be mad to shut us out.

And it continues on from there for 8 more points…

I tend to agree.

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
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5 Responses to Canada EU free trade agreement as Brexit model

  1. gareth says:

    Canada is not a good model. The Article 50 -> EEA/EFTA route is the only practicable way out without huge risk. It’s taken 40 years to get this deep in the pitcher plant, we will not be free with one bound. We need to make the right steps and have a good plan.
    Have a good rummage in http://eureferendum.com/ (Richard North) for why, and for why the Leave campaign will likely fail. Not that I want it to, but that’s how it looks unless the Remain/Govt. campaign (or our EU overlords) makes some egregious mistake… but hope is not a strategy.

  2. Ian W says:

    Unfortunately, there is.nothing in that about secure posts in the EU for out to grass failed politicians . Posts with Croesus level inflation protected pensions. So do not expect any eagerness from the ‘remain’ politicians.

  3. Sera says:

    From what I understand, invoking Article 50 starts the process- afterwards the process of negotiations could take anywhere from two to five years (or longer). This seems like a civil servant and bureaucrat paradise. What I don’t understand is WHY would they try to avoid this paradise- it’s what these people live for. Can you imagine the favors doled out to ‘friends and family’ for all of the meetings/dinners/getaways? A guaranteed job for the next five or so years to your political favorites?

  4. Since I’m a UK citizen living in France I’d hope that things stay the same, but really back in 1975 we voted to join the European Free Trade area. The Canada agreement looks to be about on par with that, and I really can’t see that Europe would suddenly decide to raise trade barriers if the UK pulled out of the full “United States of Europe” idea. That would cutting off le nez to spite la figure.

    Given that, and also that in order to sell things in Europe the UK manufacturers would have to comply with exactly the same regulations anyway, the only big difference from a Brexit would be a reduced number of new regulations in the UK which would make life a bit easier. I can’t really see a lot of real difference either way, though.

    There are some EU regulations that really don’t make a lot of sense, such as the size of an apple before it can be called an apple (that means that Cox’s Orange Pippins can’t be sold to the EU as apples, which is their loss) and the straightness of a banana. Micromanaging is never a good idea. The real question should be what is locally produced and regarded as acceptable to both the producer and consumer. This will of course vary between countries (even counties) and should not be confined to a “one size fits all” definition. That’s the big failing of the EU in that regulations are Europe-wide and generally don’t take local conditions into account. A bit like specifying that Venice should have bus lanes.

    I see the Euro as an advantage to me, in that the varying exchange rates between countries have largely gone, and the money in my pocket works the same in Germany and Spain (and a lot of others) without needing to lose some in exchanging it. The only real problem with it is that the politicians continue to think they can inflate away loans and that now someone else will pick up the tab. This idea of dipping into someone else’s pocket in order that all the poor areas in the EU should have the same standard of pensions, benefits, and work regulations is what has got the southern half into so much trouble. Taking in a lot of the Eastern European poor countries was maybe not optimal although it was very noble. Saying that people there were free to go work anywhere in the EU (at around 5 times the salary than they have locally) had the predictable consequence that they did so and thus produced unemployment problems and wage reductions elsewhere. After a while (generation or three) this will of course all settle down, since the USA manages it, but the real problem was a step change in conditions and thus people didn’t have time to adjust.

    A Brexit might lead to other countries thinking they should do the same thing, and the EU could thus fall apart into at least the “rich North” and “poor South” sections if not more subdivisions. Since the purpose of the EU was not so much based on trade but instead to make countries so interdependent that war was unthinkable, that would maybe be a bad step, and in any case we won’t be able to go back to total independence anyway.

    The big thing that might lead to a Brexit is the annoyance from the flood of regulations and laws that comes from Brussels/Strasbourg. Ignorance of the law is no excuse for not keeping it, and if we spent the time learning all of them we wouldn’t have enough time left to do anything productive, so we probably all break several laws each day. It is time that that problem was recognised and the Law was cut down to size, with the main rule being to “act reasonably”. Would the man on the bus in Clapham regard the action as reasonable or not? Still, since governments don’t feel like they are doing anything if they don’t pass more laws, I doubt if that idea is going to have much traction.

    The main annoyance with the campaigns on either side is that they are both appealing to emotion rather than facts. Either “we did well before the EU and we will do that again” or “lots of jobs will be lost if we leave”. There’s no hard information as to the actual costs and benefits.

    Possibly the best result would be to stay in and to work to fix the problems in the system, but I find it hard to make an informed decision because the information is so sparse. Having Yet Another Layer Of Government is certain to produce less real growth than a simpler system (less real wealth produced since fewer people are producing and those non-productive workers are on government wages), but should give a more-predictable result through local problems being insured by a larger group. The boom-and-bust ought to be ameliorated. On the other hand, I don’t trust the politicians to get it right even if they have all the right tools, since the bigger pots of money will also most likely result in more waste and corruption.

    Toss a coin….

  5. gareth says:

    @ Simon Derricutt
    Please do go have a rummage at http://eureferendum.com/ (Richard North) and at leavehq.com. There is so much that we all need to understand about how things work now, why we (and all EU states) should make the first steps in leaving the EU (and initially joining EFTA/EEA as the first safe step away), and where we need to be heading.
    The current UK “debate” is virtually zero information, and what information that is available is mostly untrue (on both sides). Go look at the actual text of the deal that “call me Dave” brought back (search 0216-EUCO-conclusions). Why is it framed like it is? How is that enforceable? E M – you are a detail man – dig here!
    I personally believe that the Leave camp will lose (rather than the Remain win) basically through their own ignorance and incompetence. I’m sure that a well informed electorate would vote to leave (as they would have in 1975 had they known what we know now). I think there is no chance of them becoming well informed and so will go with the government lead, EU paid for, FUD campaign, and vote to keep hold of Nanny’s hand, without ever realising what kind of person she really is…

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