52 LEXPERT MAGAZINE
|
JUNE 2018
| BREXIT |
"I don't mean to be critical of the gov-
ernment, naturally, with what's happen-
ing with the North American Free Trade
Agreement, introducing all these new free-
trade agreements is great. Diversifying the
Canadian trade export market is great. But
it takes time to negotiate, ratify and imple-
ment each one at the domestic level."
Even with CETA now provisionally
implemented, she says, some Canadian
government departments still lack the
necessary procedures required to fulfill
Canada's commitments.
AS for using CETA as a template for a
new Canada-UK deal, Swick doesn't see it.
"It's not a good model because a lot of pro-
visions are unnecessary for the Canada-UK
relationship. e two countries really have
to think of what issues should be covered
and in what way, then look around and see
how to tackle them. e bad part of that is
that will take time, more than two years or
whatever the transitional period is."
If the withdrawal agreement is not
signed this fall and it is a "hard exit," Swick
like others says the UK will have to default
to WTO agreements. While the UK has
remained a WTO member, it was as part
of the EU. So Britain is in the process of
"rectification," or making the transition
back to being a WTO member solely in its
own right.
at entails things like negotiating
its portion of tariff-free block quotas for
imports of various products, as well as on
goods and services, that were negotiated
on behalf all EU countries, including the
UK, she says. "ere's going to have to be
some mechanism to examine the imports
of each product by the UK, and the same
product by the rest of the EU, in order to
determine allocation."
While the UK and EU permanent
becomes a question of what kind of re-
sources the UK will have to negotiate a
bilateral deal because, understandably, if
it remains significantly under-resourced
on the trade policy and trade law front,
concluding an arrangement with the EU
is going to be its priority."
But if it has the resources, he, too, feels
Canada is a good candidate for an early
agreement. "ere are longstanding trade
and investment ties, there aren't too many
commercial sensitivities on one side or
the other. I think there's even room to go
beyond the CETA in areas like regulatory
cooperation, which would be a big one, in
terms of labour mobility and temporary-
entry provisions, and commitment on
agricultural trade and trade on services as
well. So I think Brexit, in a sense, creates an
opportunity to deepen trade liberalization
between Canada and the UK."
e question is how long it will take:
weeks, months or years.
Asked whether she believes a trade deal can
be done by Jan. 1, 2021, Brenda Swick, a
partner at Dickinson Wright LLP in To-
ronto, is blunt. "No," she says, adding Ca-
nadian negotiators are just getting through
the Trans-Pacific Partnership Agreement,
which Canada signed in March but still
needs to be implemented.
representatives to the WTO have sent
all WTO member countries a letter say-
ing they are working on allocation issues,
"can you imagine how long this is going
to take?" Swick believes with all the
good will in the world, whether it is done
through an EU-UK deal or a reversion to
WTO standards, the untangling of Brit-
ain from the EU is a "massive" undertak-
ing. "e devil is in the details. is is not
an overnight exercise."
If she and many others in the trade bar
are right and there's just not enough time
on the clock for the UK to negotiate a so
exit from the EU, Prime Minister eresa
May risks running into a very large prob-
lem, says Keith Mitchell, a partner at Far-
ris, Vaughan, Wills & Murphy LLP in Van-
couver. An election.
Mitchell says free-trade arrangements be-
tween countries can be hard to push across
the finish line partly because they involve
domestic politics, and they can be slowed
by a myriad of stakeholder interests.
When it comes to Britain's exit from the
EU, he doesn't see the last day of 2020, the
end of the proposed transition period, as
being the key date. "To me, the magic num-
ber is 2022." Why? "Because Britains go to
the polls for a general election."
Depending on how Brexit ends, he says,
trade may be a major election issue. "A lot
of the discussion of the trade arrangements
turns on who's the government and what's
their mandate. at will be terribly ger-
mane. ere is some view that once the po-
litical referendum is held this could never
be the subject of political debate again, but
I'm not so sure.
"It's hard to say this whole thing is in ce-
ment and is going ahead as schedule. I don't
underestimate the tenacity of the current
British Prime Minister, but you're only as
good as your last election. I think she hopes
to run on a completed Brexit, but that re-
mains to be seen." ere will be a "thicket
of political issues as this thing evolves" and
stakeholders who have the ability to slow the
process down with consultation periods.
Even with an EU-UK deal in place before
the next general election most free trade ar-
rangements have termination clauses, he
says, and even if they don't, successive gov-
ernments can come up with ways to create
leverage that forces the other party to re-
PETER KIRBY
>
FASKEN MARTINEAU DUMOULIN LLP
"Financial services in particular, is a significant
sector to worry about because we don't know how important
London is going to remain as a financial-services centre.
Should we be looking at Europe rather than the UK for access?
That's one that will be very dependent on what the final
relationship with the EU looks like."
