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Canucked. Where the UK goes next

September 28th, 2018

Where do we go from here?  After Salzburg, infuriated by the dismissive way in which her fellow EU leaders sought to cast the Chequers approach to one side, the Prime Minister took the usual British approach of dealing with foreigners, speaking loudly and slowly. 

The Prime Minister would like to plough on.  She appears to be almost alone in that.  In Theresa’s Party, the EU don’t want Chequers, the Labour Party don’t want Chequers, the Tory Reform Group don’t want Chequers, the ERG don’t want Chequers and, rumour has it, a large chunk of the Cabinet don’t want Chequers.  But she still insists on inflicting it on an unappreciative audience.  This does not look to be a promising strategy.

Theresa May can justly point to the absence of alternatives.  The EU have to date shown no substantive flexibility, not seeking meaningfully to address obvious concerns of the British.  Her domestic critics carp but have not yet unveiled any coherent alternatives.

Some of her critics, recognising this, are now gathering around the Canadian flag. The detail of the Canadian option is never particularly explored: the single word “Canada” has become code for a still looser relationship between the EU and Britain.

So what actually is the Canadian option?Canada does not participate in the single market but in CETA, the deal that Canada has agreed with the EU, it has negotiated tariff-free trade in industrial goods and most agricultural products. Canada also has negotiated access to the services market, except where specifically excluded (financial services are excluded). Because Canada is outside the single market, there are more regulatory barriers, including customs checks. There is a CETA-specific dispute resolution process.

The appeal of Canada to some of those proposing it is that it is less linked to the EU than Chequers. The appeal to others is that it is better than no deal at all. The appeal to some, I suspect, is that there is no hint of Europeanness about the name.

Many of the problems of Chequers can be found with a Canadian-style deal. Something has to be done about Northern Ireland: a Canadian deal would do nothing to address that.

No one seems to be bothering to ask whether it is actually achievable. The trade negotiations leading to CETA were launched in May 2009. It still isn’t fully in force. It provisionally came into force in September 2017 after both the EU and Canada ratified it. However, it still needs to be ratified by all of the EU’s member states. So far it has been ratified by nine member states.

This leisurely pace would not matter so much if it were clear that the job will be done in the end. It isn’t. The Belgians have launched a legal objection to the dispute resolution process. No fewer than 14 countries might conceivably have a referendum on CETA. And Italy has already stated that it will refuse to ratify the CETA deal.

All of which makes it a very uncertain assumption that the EU member states, when asked, will actually agree to a deal that looks like CETA, whether or not souped-up.  Governments around the EU are both more unstable than they were when CETA was agreed and less biddable.  Getting them all to agree to a variant of an agreement which some at least of them now have reservations about looks like a major job all by itself.

Yet again, Britain is making the mistake of presuming that what it proposes will essentially be acceptable to the EU.  You’d have thought that after David Cameron’s renegotiation, the fraught path to the December agreement last year, the interminable discussions about Northern Ireland and the Salzburg assault on Chequers that the presumption might start to fall out of favour.  But it appears not.  Britain may be about to wander down yet another blind alley.

Alastair Meeks