The implications of CETA

The Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU has been – for the moment – derailed by a vote in the Wallonian regional parliament in Belgium. What does this means for Brexit?

The first thing is that it gives the lie to the Brexiter claim that national sovereignty is over-ridden by an EU ‘superstate’. The Wallonian vote shows that nations – and in some circumstances even regions – can veto EU policies. But Brexiters are never ashamed to run two contradictory arguments, so seeing that the sovereignty one is bogus they use CETA as an example of how the EU is incapable of making trade deals because they require unanimity of member states. So the Brexit proposition is completely unfalsifiable: if (in this case) CETA is signed it proves that the EU is deeply flawed; if it isn’t signed then it also proves that the EU is deeply flawed.

However, in the post-referendum landscape what matters is not making arguments against the EU but in seeing how the claims of Brexiters that a quick, easy and good trade deal with the EU stack up. And of course the current situation with CETA shows that they don’t, because any UK-EU deal could be voted down in just the same way. Brexiters, both before and after the referendum, repetitively claim that a good deal is assured because ‘the German car industry’ will ensure it (or, in some variants, the French wine industry). But as the Wallonian vote shows EU trade policy is not determined by any one member state, still less by particular industries within these states.

All of this matters, a lot, for the general Brexit proposition, but CETA matters in a very particular way because it was touted during the referendum by leading Brexiters, including Boris Johnson and David Davis, as the model for a Brexit UK-EU deal. And there are now some commentators suggesting that CETA could be re-configured as a CUKTA (Canada-UK Free Trade Agreement).

There are grave objections to both these ideas. As regards CUKTA, such a deal could only be signed if there was hardest of hard Brexits (i.e. if the UK leaves both the EU single market and the EU customs union), and only after that – so it would be some way off. And both CUKTA and a UK-EU FTA on the CETA model would not cover most services and would not remove most non-tariff barriers (NTBs) to trade. For a CUKTA that would perhaps not matter too much (as there is currently no UK-Canada deal), but as a UK-EU deal it would be disastrous because it would be far worse than single market membership which encompasses services and NTBs.

Finally, it is notable that neither of these ideas is a shining example of the exercise of sovereignty that Brexiters claim as paramount. Unlike Wallonia, the constituent parts of the UK would have no say in such deals and nor, as things stand, would the British parliament.