Brexiters like Boris Johnson are pushing a Canada +++ Brexit trade deal. Here’s what that would actually look like Better to call it EU – – – since, in terms of trade, it would inevitably be worse than what Britain currently enjoys

In recent weeks Brexiters have been pushing hard for a Canada +++ Brexit model, meaning something based on the recent EU-Canada Free Trade Agreement (FTA), but with some additions.

They point to recent statements from Donald Tusk and others that this, unlike the Chequers proposal, would be welcomed by the EU. There’s actually nothing new about this. The EU has said it all the way along.

However, they mean something crucially different to the Brexiters. For the EU, Canada +++ would include some version of the Northern Ireland backstop proposal. That is because any form of FTA, being outside of both the single market and a customs union, entails a border.

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Brexiters and the EU don’t agree on what Canada +++ means

Some Brexiters do not accept this but they should, not least because one thing they want to achieve is an independent trade policy, with Britain free to set its own tariffs and regulations. For that to happen, as for a single market to exist, border control is necessary to prevent cross-contamination.

As yet, no technology exists to undertake such control without any physical border, and perhaps never will. It either has to be a land border, which would conflict with the Good Friday Agreement, or, the EU backstop proposal, a sea border between Great Britain and Northern Ireland.

‘There is no meeting of minds between the Brexiters and the EU about what Canada +++ means’

So there is no meeting of minds between the Brexiters and the EU about what Canada +++ means. But even if there were, however many + signs are added an FTA will always be inferior to EU membership. This is partly because it cannot address the issue of cross-border just-in-time supply chains, precisely because of the necessity of border checks, which matters hugely for the auto and aerospace industries, amongst others.

Crucially, an FTA can never match the single market in terms of services trade, which is vital for Britain’s economy. Much of what Brexiters mean by ‘+++’ is greater services coverage than the baseline Canada model.

But there is only limited scope for this because the core impediments to services trade (and, often, goods trade) are non-tariff barriers (NTBs) – the regulatory and legislative differences between countries that impede trade. Things like Mutual Recognition Agreements (MRAs), which Brexiters sometimes talk of, only have a limited amount of traction over specific barriers in particular sectors. They aren’t a systemic solution to NTBs.

The EU single market in services, although still incomplete compared with goods, is by far the most comprehensive attempt in the world to erode NTBs. This is achieved by a market-wide system to set and enforce rules, culminating in the ECJ. There’s no way of removing deep and complex regulatory

differences other than having such a common system. But this, of course, is exactly what Brexiters won’t countenance, as they see it as taking away sovereignty and ‘losing control of our own laws’.

That’s why, for them, an FTA is acceptable whereas single market membership is not. Yet this cuts both ways, for it is precisely the reason why no FTA (nor WTO terms, for that matter) has or could have extensive liberalisation of services trade. Brexiters say, correctly, that Britain will, uniquely, start from the point of complete harmonization with the EU. But they are incorrect in claiming that this makes matters easier or quicker.

‘The Brexit trade deal will be the first in history to make terms of trade more restrictive’

It would certainly make joining the EU easier and quicker were Britain not a member, because then the issue would be how to converge. So the job would already have been done. But the Brexit trade deal will be the first in history to make terms of trade more restrictive, and the issue will not be how

to converge but how to enable divergence.

Canada +++ does not mean UK having its cake and eating it

So whereas for other countries FTAs with the EU improve trading conditions, for Britain an FTA will by definition make them worse. Canada’s deal was good for Canada-EU trade. But Britain’s relationship with the EU is completely different to Canada’s, both because of geographical proximity and the fact of 40 years of ever-greater economic and business integration with the EU. Even if achieved, Canada +++ would not enable Britain to ‘have its cake and eat it’. Better to call it EU – – – since, in terms of trade, it would inevitably be worse than what Britain currently enjoys.