Great excitement in the European Union this last week when it transpired the best ever trade deal the EU has ever negotiated and with the most valuable EU trading partner to date, Canada, was about to fail after seven years of negotiation. It is called CETA (Comprehensive Economic & Trade Agreement).
Why? Because of Wallonia. Not a member of the EU even, but just the French speaking part of Belgium with a population 3.6 million and one of Belgium’s five regional assemblies. So the Wallonian Parliament was in a position to prevent the Belgians signing a trade deal applying to all 500 million EU citizens.
After some behind the scenes pressure or ‘incentivising’, the Walloons finally capitulated and the deal was signed last Sunday, with much Gallic kissing of Canadian Premier Trudeau.
For Brexiteers, this can be argued both ways. If the deal failed the EU would lose all credibility in ever attempting another trade deal. Why should anyone waste seven years when the EU is this useless despite dealing with such a natural ally? Already other potential tie-ups – the US (TTIP), India, Japan, and MERCOSAUR covering much of Latin America – are stuck in the works – or dead. China hasn’t even started.
So doing a UK free trade agreement might prove pointless and we might as well embrace the guaranteed fallback set down by international rules (the World Trade Organisation (WTO) agreement) and pay each other’s tariffs – £13bn for the EU and £5bn for the UK. Six out of ten of the EU’s largest trading partners, such as the US and Russia have this deal now.
On the other hand, now it is signed, CETA is good news for Brexit. It gives near complete 99 per cent non-agricultural access to the EU single market with no free movement and no fees being paid to the EU.
So it took seven years: two years were wasted by the EU trying to dictate human rights to Canada (seriously) and two by crossover with the unpopular TTIP over how legally to protect investors.
Actual negotiations amounted to three years – but the UK is already ‘compliant’ as an EU member now with no tariffs and quotas, so being locked for years discussing thousands of tariff lines (32 per cent on New World wine etc) is not necessary. Financial services yes, that will be necessary and regulatory regimes, but it’s all doable if people stopped talking down our strong negotiating position as the other EU-27’s largest trading partner – they need us more.
So CETA is a great template for a UK-EU deal. I believe we need to take CETA and improve it for the UK – more on services and finance, for example, in a ‘Super Canada’ deal. But it is a very good starting point for a free and independent nation to trade with the EU.
That’s how we must start thinking – even though it will require a bold, confident but justified new British mindset. Rather a refreshing and overdue change, I’d say.
David Campbell Bannerman is Conservative MEP for the East of England and a member of the European Parliamen’s trade committee.