The 2020 EU-UK Trade and Cooperation Agreement as a Canada Style Agreement

EU3D Research Papers, No. 4, May 2021 (SSRN)

Nanette Neuwahl

Abstract

This paper looks into the question of differentiation in EU foreign policy. Does the
Trade and Cooperation Agreement (TCA) reached between the EU and the UK in
December 2020 fall within a familiar differentiation track? In particular, is it a
‘Canada style’ agreement rather than, say, a ‘Norway style’ agreement? To what
extent is it an attempt by the EU to nudge the UK into conformity with EU
regulation? Does the agreement show that ‘geography matters’? We shall see that it
is most of all a new generation deep trade agreement, like the Comprehensive
Economic and Trade Agreement (CETA) between the EU and Canada. In a typology
of international agreements, deep trade agreements have their distinct place. Their
features allow parties to build a meaningful partnership while keeping a fair amount
of control. This paper points to parallels between the EU-UK TCA and such an
agreement. It gives the UK the opportunity to ‘take back control’, leaving it much
more freedom than under a Norway style agreement. Its main feature is ‘freedom
to legislate’, subject to the maintenance of a level playing field, and human rights
protection. At no instance, there is a hard obligation for the UK to accept stricter
environmental or sanitary standards on its territory than hitherto (the unique
alignment of Northern Ireland having been laid down earlier in the 2019
Withdrawal Agreement). Importantly, the sophisticated dispute settlement
provisions of the TCA have a unique feature, namely, that of facilitating divergence
between the EU and the UK. The TCA allows the parties to inflict tariffs or to
suspend (parts of) the agreement only under specific circumstances. Arguably,
these circumstances are uniquely applicable to the TCA.

Keywords

Alignment, Brexit, Canada style agreement, Deep trade agreement, Dispute settlement, EU external policy differentiation, EU-UK Partnership, Level Playing Field, New generation agreement, Regulatory cooperation, Trade and Cooperation Agreement

Published June 24, 2020 8:51 AM - Last modified June 2, 2021 4:29 PM