Canada-style agreement remains the likely outcome of Phase II Brexit negotiations
Ji Xianbai

Editor's note: Ji Xianbai, PhD, is a research fellow with the International Political Economy Program of S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore. He is also an Associate Fellow of the EU Centre in Singapore. The article reflects the author's opinions, and not necessarily the views of CGTN.

If leaving a community of which it has been part of for nearly 50 years is excruciatingly difficult, Britain will soon find that establishing a comprehensive future partnership with the European Union (EU) in less than a year's time to be an even more challenging, if not impossible task.

The second phase of Brexit negotiations is due to kick off next Monday (March 2). On Tuesday, the EU had just approved a negotiating mandate in preparation for the commencement of talks. Britain is likely to publish its own negotiating directives soon.

While the upcoming negotiations will seek to rebuild cross-Channel ties over issues as wide-ranging as trade and economic relations, law enforcement and judicial cooperation, foreign policy, security and defense, and Britain's participation in EU's thematic programs, all the spotlights are on trade, the negotiation outcome of which will have direct bearings on the welfare and economic prospect of millions of people in Europe as well as on the British Isles.

For better or worse, both sides will enter into the negotiation with crystal clear political objectives. The EU strives to preserve the integrity of the European Single Market (ESM); and from Brussels' perspective, if the UK wants to have high quality access to the ESM as it did previously as an EU member, there should be full commitment to four freedoms (goods, services, capital and people), alignment with EU socioeconomic regulations and an exclusive role for the European Court of Justice (ECJ) to police the trade deal.

Anti-Brexit protesters in front of Downing Street in London, UK, January 8, 2020. /Reuters

Anti-Brexit protesters in front of Downing Street in London, UK, January 8, 2020. /Reuters

Britain's negotiating positions are equally unambiguous. London wants to achieve complete economic, political and legal independence by the end of the transition period ending on December 31 this year. That entails reserving the rights to diverge from EU regulations, pursue policies that are not necessarily identical to or compatible the EU's existing and future rules (in areas such as competition, labor and environmental standards, climate change and taxation) and ending the jurisdiction of the ECJ over British courts in the UK once and for all.  

As such, there are four possible scenarios on January 1, 2021. First, the EU gets its way, effectively tying up Britain to its customs union, single market and the entire rule-book. It could be labeled the "Turkey model" where the UK leaves the EU politically, but not at all economically.

Second, British positions prevail in the negotiations. In this scenario, the UK would have friction-less merchandise trade with the EU and considerable access to the European services market while maintaining an independent trade policy that enables it to strike free trade deals with countries across the globe. Britain would emerge as a "Global Britain," combining the best of the two worlds (i.e. being independent yet having unfettered economic access to the EU).      

Third, neither side gets its way and, in the end, settled on a bare-bone deal of tariff-free, quota-free "Canada-style" trade relations. Flow of tangible goods would not be affected. But the ECJ had no jurisdiction in the UK and reciprocally British services firms like banks and trading houses would be stripped of their pass porting rights to the vast European services market.  

And finally, there is a possibility that negotiations collapse and the two sides trade on World Trade Organization terms. Lest there be any political accusation of the British government deliberately pursuing a policy of no-deal, Boris Johnson has called this scenario "Australia-style" arrangement as a gimmick. In fact, Australia has no free trade agreement with the EU and has been actively negotiating one with Brussels since June 2018.

Across the four potential scenarios – "Turkey", "Global Britain", "Canada" and "Australia" – the most probable outcome remains a Canada-style trade arrangement, which is the lowest common denominator of the declared EU and UK positions. The EU will not allow the UK to cherry pick, and the UK will not allow the EU to have a say over its domestic policies post-Brexit. The "Australia" scenario, or rather a no-deal scenario, is too economically disruptive to be politically viable for both sides.        

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