Throughout the Brexit negotiations, the EU-Canada Comprehensive Economic and Trade Agreement (CETA) has been proposed as a model for the UK’s future relationship with Europe. There are pros and cons to this proposed model, including the elimination of tariffs but serious regulatory barriers.
A deal like Canada’s would eliminate most tariffs and deliver control over immigration and trade policy. However, outside a customs union, the UK would face customs declarations and a hard border between Ireland and Northern Ireland. The services sector (80% of UK GDP output), would also face much reduced access for trade. And the lack of a common rule book would create a number of serious regulatory barriers.
The facts at a glance:
- A CETA-like deal would pile burdens on manufacturers and food firms
- The biggest losers of a CETA-like deal are the UK’s services companies
- A CETA-like deal would fail to deliver frictionless trade
- Without a customs union and a common rulebook for goods, a CETA-like deal would lead to a harder border on the island of Ireland.