A Trade Deal With The EU? You Can Coco If Means Only the EU Benefit.

Graham Charles Lear
5 min readAug 29, 2020

12 years of talks and Canada’s EU deal resulted in its goods deficit worsening by 27%. 16 years after starting talks, Canada’s deal still hasn’t been ratified by half the EU’s countries. Some Trade deal that is hey boys and girls.

The EU has so few serious trade deals with the rest of the world that it still trumpets one deal — the one with Canada — which only half the EU27 countries have signed. It’s a deal which has benefited the EU more than Canada. If the UK’s experience with the EU follows Canada’s, questions must be asked about whether the current UK-EU talks are worth the candle.

Back in the glory days of 2016 immediately after the British people had voted to leave the European Union, the EU Commission was desperate for any kind of positive news to present.

In October 2016 they duly invited the Prime Minister of Canada, Justin Trudeau, to Brussels to sign the long-awaited ‘Comprehensive Economic and Trade Agreement’ (CETA) which had notionally been agreed three years earlier, back in 2014.

Never one to pass up a photo opportunity Mr Trudeau accepted the EU’s invitation, and on 30 October 2016 CETA was signed by him amongst much pomp and circumstance in Brussels.

What has happened to Canada’s trade deficit with the EU since signing the trade deal?

Canada’s trade deficit since signing the EU-Canada trade deal in 2016

Canada’s deficit in goods with the EU27 has worsened by 27%, to -€17.5bn

Canada’s deficit in services with the EU27 has not improved either and is now -€5.5bn

Canada’s EU27 exports have risen, but the EU27’s exports to Canada have risen far more

When the UK is removed, Canada’s exports to the EU overall will have dropped dramatically

Four months before Canadian Prime Minister Justin Trudeau flew to Brussels to sign the EU-Canada (CETA) deal, the British people had voted to leave the EU. At that moment the EU deal suddenly became much less sweet to Canada.

In 2016 Canadians sold goods worth $Canadian 41,880 million to the EU28

43% of this was actually sold to the UK

Without the UK, Canada’s EU Trade Agreement is worth a whole lot less than it was

The tortured history of this trade deal which the EU is so proud of

The EU says the EU-Canada trade deal (CETA) took 7 years. No, it didn’t. It started in 2004 in Ottawa. That’s 12 years before it was signed.

Timeline of Canada-EU Trade Deal

2004: Ottawa, the deal framework was agreed, negotiations started

2009: Prague, negotiations were rebranded as CETA trade deal

2014: Toronto, a signed ‘in principle’ agreement was presented

2016: Brussels, the deal is vetoed by Belgian region of Wallonia

2016: Brussels, the deal is signed by Canadian PM Justin Trudeau

2017: Brussels, parts of the deal are finally effected

2020: Brussels, only 14 of the 27 EU member states have so far ratified the deal

None of the EU27’s top 3 economies has ratified: Germany, France, and Italy

12 years since negotiations started with the EU, and then the problems really started

If Mr Trudeau thought the CETA deal was done and dusted, he was in for a surprise. First up was the divided EU member state of Belgium, which still today only barely functions as a country. Belgium requested the ECJ to rule on whether the CETA deal was in fact lawful.

In the months leading up to Mr Trudeau’s visit, ‘the Walloons went up’. Wallonia is a French-speaking part of Belgium with its own parliament, and they refused to sign. In the end, a day before Justin Trudeau’s arrival in Brussels, the pressure was brought to bear and Belgium agreed in principle to sign, although it still hasn’t ratified the deal.

The United Kingdom ratified the deal on 08 November 2018, while it was still a member of the EU.

How logical are the EU?

It would seem logical to try to do trade deals with the world’s largest economies and to make these the key priorities. After all, if you compare just one deal with a country like the USA with a country like Canada, a US deal would be worth ten times what the Canadian deal is worth.

Unfortunately, after more than 60 years of existence, the EEC/EU hasn’t managed to do a trade deal with the biggest and most powerful economy in the world.

What price an EU-UK trade deal?

After America, the United Kingdom is the EU27’s second-largest market — far bigger than that of China.

Instead of working hard and in good faith to negotiate a new trading arrangement with the UK, the EU has placed every conceivable obstacle (and quite a few inconceivable ones) in the way of achieving a successful outcome. This started in 2016 when it refused to have any discussions with the UK — not even informal ones. In the intervening years, the number of artificial obstructions it has thrown up has been legion.

Hope is now being placed in a last-minute compromise being forged, with Barnier being sidelined and the EU27 leaders (Angela Merkel in particular) becoming involved in the final months of this year.

What we should do with the EU

Our response to the EU should be simple. No compromise. We should tell the EU27 politely: “Do a normal free trade deal now or we will hold you as acting in bad faith. The evidence for this is now unequivocal and overwhelming. As a result, we will be legally entitled to repudiate the Withdrawal Agreement. No massive divorce bill. No nothing. Trade with us on WTO terms, by all means, if you want to try to keep the €100bn+ trade surpluses you’ve been running with us each year.

The message from the country to Prime Minister Johnson is equally simple: “Announce immediate and full-scale preparations for a WTO-terms exit. Publicise these daily, just like you did with the Coronavirus. And make sure Angela Merkel and Emmanuel Macron know that you mean business. Announce that you will also be repudiating the Withdrawal Agreement.”

[ Sources: Statistics Canada | Eurostat | EU Commission ]



Graham Charles Lear

What is life without a little controversy in it? Quite boring and sterile would be my answer.