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The ’Canadian model’: why Ceta isn’t a blueprint for Brexit

The Guardian | 29 November 2016

The ’Canadian model’: why Ceta isn’t a blueprint for Brexit

by Dan Roberts

Amid the fragments of negotiating strategy glimpsed this week in Downing Street, one phrase offered momentary cheer to those still hoping to “have their cake and eat it” when Britain leaves the EU.

The “Canadian model” is not another admiring reference to the country’s prime minister, Justin Trudeau, but his government’s success in negotiating an EU trade deal that provides a possible template for Britain’s future relationship with the bloc.

After years of negotiations, the Comprehensive Economic and Trade Agreement (Ceta) signed by Trudeau and the commission president, Jean-Claude Juncker, last month is all the more alluring because it comes without the ties demanded of closer neighbours such as Norway and Switzerland.

But those involved behind the scenes of this hard-fought trade deal warn that looks can be deceptive when it comes to judging its suitability in a British context.

Though Ceta provides for the liberalisation of trade barriers and customs duties required by Britain’s manufacturing exporters, there is little to match the “passporting” agreements for financial services that the City of London currently enjoys inside the EU.

“It’s quite difficult to compare the Ceta negotiation process with Brexit because the EU and UK are negotiating the terms of a divorce after a 40-year period of economic, legal and social integration,” said Christophe Bondy, who spent five years advising the Canadian government on the deal before joining London law firm Volterra Fietta.

“There is already a very deep relationship in place between the UK and the EU,” he added. “The question is what to keep of that, and on what terms.”

Inasmuch as anything concrete can be read into a handwritten note snapped from afar by press photographers, this crucial difference appears to be acknowledged by those inside the British government too.

The notes – carried by an aide to the Tory vice-chair Mark Field after a meeting at the Department for Exiting the European Union – talked of the need to seek “Canada plus” with “more on services”. David Davis, the Brexit secretary, also described the Canadian model as “optimum” in a speech last February, but only a “starting point”.

Yet, even passing a fairly limited and straightforward trade deal with Canada proved far more difficult than anyone expected. Adding more layers on top within the two-year timeframe allowed for Britain’s departure could prove far from a cakewalk.

The Canadian deal was arguably 22 years in the making. This was how long ago the then prime minister, Jean Chrétien, first mentioned the idea in a speech to the French senate. Formal negotiations started back in 2009.

They were almost derailed at the last minute too. Under the terms of a “mixed treaty” – affecting both EU and national law – negotiators had to seek individual ratification from all member states.

In the case of Belgium, this even required agreement from six regional assemblies, something that led to the near collapse of talks in October when Wallonia objected to aspects of the deal that affect environmental, labour and consumer standards.

The Walloons were particularly anxious about terms that would allow multinational investors to take states to a special arbitration court in the case of disputes – echoing similar concerns among campaigners about the struggling EU/US trade deal known as TTIP (transatlantic trade and investment partnership).

“It seems obvious that the EU is now not capable of having an international agreement, even with a country that shares European values such as Canada, even with a country that is so kind and patient,” said dispirited Canadian trade minister Chrystia Freeland after Ceta almost collapsed. “Canada is disappointed. I am personally very disappointed. I have worked very, very hard. We have decided to go home. I am truly very, very sad.”

Some tweaks put the bulk of the trade deal back on track, but there is still the possibility that the investor resolution scheme could be blocked before it is voted on in Europe and campaigners were organising protest demonstrations in London again on Tuesday.

Ironically, Britain’s past insistence of preserving the right to intervene in EU-wide negotiations makes it even more likely that a future Brexit deal would be subject to the same “mixed treaty” rules requiring national ratification in future.

Even if these steps go more smoothly in the case of divorce, there is still bemusement among many Canadians that such an approach could possibly provide any improvement on all the trade advantages that Britain already enjoys.

“The Canada-EU deal is an ambitious, forward-looking agreement. It seeks to build new economic ties between Canada and the EU by easing existing barriers to trade and investment,” said Bondy. “ But even with the Ceta, Canada and the EU are a long way from the level of deep economic, legal and social integration you get from being an EU member state.”

 source: The Guardian