Many advocates of a ‘clean break’ or ‘hard’ Brexit believe that Britain should be aiming to conclude an agree with the EU that uses the Canada- EU CETA free trade deal as its model. This would aim to make a virtue of having no closer ties between Britain and our nearest neighbours than between Canada and Western Europe even though they are about 2,500 miles apart. Financial expert and Conservative Councillor Gerard Fox writes for the Conservative Group for Europe on why the Canada +++ model is not the right way forward. Indeed, his new paper ‘The problem with Super Canada’ concludes that a Super Canada deal even in its most idealised form would fall substantially short of the economic access that Britain currently enjoys to EU markets with adverse immediate and long-term consequences for economic growth, Foreign Direct Investment and trade.
Super Canada is a deal that:
- Cannot be delivered in the transition timeframe in any meaningful way.
- Denies us frictionless access to the Single Market and does not address supply chain issues.
- Is inadequate for an economy as services focused as the UK.
- Does not solve the Irish Border problem.
The idea that a deep and comprehensive deal of this kind can be negotiated from the perspective of current regulatory alignment while allowing the UK the opportunity for regulatory divergence in pursuit of other trade deals is nonsensical.
Substantially, for a medium-sized open economy like the UK, regulatory divergence is an illusion. There are three dominant regulatory regimes in the world: the EU, US and China. The UK’s regulatory standards will tend to comply with those of its largest proximate markets and these rules will permeate our domestic economy.
The enormous size of a Super Canada deal with the EU in any case, even starting with the established CETA framework, would take many years to negotiate, and involve substantial regulatory alignment of the UK with the EU (like Switzerland, for example).
The extent of our economic integration with Europe and countries operating in the extended internal market or via rules and agreements made with the EU, means “no deal” would deliver substantial short and long-term damage to the UK’s economic growth prospects, tearing apart 45 years’ worth of economic integration overnight, creating huge legal and commercial uncertainty while erecting high barriers to trade.
Read the full piece here: https://www.conservativegroupforeurope.org.uk/whats-problem-super-canada