With the support of Canada's Social Sciences and Humanities Research Council (SSHRC) and the UK’s Economic and Social Research Council (ESRC), Professor Armand de Mestral and Dr Lorand Bartels, a Reader in International Law at Trinity Hall, Cambridge, have been conducting a study of the legal structure of the trading relationship between the UK and Canada after Brexit.
The departure date of the UK from the EU is set to take place on March 29, 2019, unless this date is postponed by mutual agreement. It is therefore incumbent on both Governments to find a mutually satisfactory accommodation by that date. Canada’s Prime Minister Justin Trudeau has stated the intention of his government to ensure that mutual trading relations are maintained on the basis of “CETA +”, this guaranteeing existing MFN (Most Favoured Nation) and preferential rights enjoyed by UK and Canadian citizens in our respective countries. Achieving this goal in the very short space of time available may be challenging.
Project synopsis: The UK and Canada share a close legal and institutional history. Like the UK, most of Canada uses the common law legal tradition. The countries also share many basic constitutional principles. To ensure continuity in trade between the countries post-Brexit, policy-makers, industry and the wider community will need more clarity on the legalities governing trade in goods and services.
This project will study how much existing international legal arrangements and relevant domestic laws already provide for a satisfactory trading relationship between the UK and Canada. The researchers will also explore various bilateral options, such as transitional adoption of the Comprehensive Economic and Trade Agreement as an agreement between the two parties; or adoption of a new, bilateral agreement. The project will also explore the UK’s position in the World Trade Organisation after the country leaves the European Union.
The general objective of the review is to give policy-makers, the business community, journalists and the general public an understanding of the relevant issues posed, and of the state of current information on the subject.
Recent academic articles and other publications about Brexit
The Fallacy of Independent Trade in the United Kingdom
Armand de Mestral & David Gantz, May 16, 2019, Centre for International Governance Innovation (CIGI) blog
Many aspects of Brexit are difficult to comprehend, but one of the least sensible reasons for the United Kingdom’s looming departure from the European Union is a rather fanciful assumption: once Britain is detached from the European Union, other trading nations will fall over each other to conclude free trade agreements (FTAs) with the United Kingdom. As demonstrated by preliminary discussions with India and the United States, this is largely wishful thinking. Any opportunity for the United Kingdom to benefit from new, third-country FTAs are distant and speculative, while the costs are guaranteed to be substantial. A few geopolitical and economic realities suggest that the freedom to negotiate new trade agreements won’t serve the United Kingdom as well as Brexiteers suppose. Keep reading on the blog...
Is It Too Late to Walk Back Brexit?
Armand de Mestral, February 27, 2019, Centre for International Governance Innovation (CIGI) blog
The United Kingdom is set to withdraw from the European Union at 11:00 p.m. on March 29, 2019. But, looking at a few key situations, it seems that Brexit may have already happened. First, the European Union (Withdrawal) Act of 2018 set the date of March 29, 2019, as the point at which new EU law ceases to apply in the United Kingdom, and the point at which the decisions of all EU institutions will cease to have legal effect in the United Kingdom. This law is in force and repeals the European Communities Act of 1972. Nothing has been done to repeal the Withdrawal Act. Keep reading on the blog...
A Hard Brexit Could Be Inevitable
Armand de Mestral, January 30, 2019, Centre for International Governance Innovation (CIGI) blog
In a long and impassioned debate on January 29, 2019, the United Kingdom’s House of Commons voted to advise the government not to leave the European Union without a deal, and advised Prime Minister Theresa May to return to Brussels to renegotiate “legally binding amendments” to the Irish backstop portion of the Brexit deal. Is there any method to this madness? Keep reading on the blog...
How Will Brexit Impact Canada?
Armand de Mestral, January 22, 2019, Centre for International Governance Innovation (CIGI) blog
On January 15, 2019, UK Prime Minister Theresa May, having negotiated a withdrawal agreement with the European Union — which would recognize the departure of the United Kingdom from the European Union but also give both parties a 19-month period to reach agreement on a long-term economic relationship — then failed to obtain a majority for the deal in Parliament. By a 432–202 vote, the withdrawal agreement was rejected in one of the most resounding defeats of a UK government in years. Keep reading on the blog...
Final Report: Trade Relations between Canada and the UK in the event of Brexit
Armand de Mestral & Lorand Bartels, December 2, 2018 - Strategic Knowledge Report SSHRC-ESRC
The trade statistics on UK–Canada relations are eloquent. Britain is the fifth largest single national economy in the world. Canada’s economy is the tenth largest. The UK is the second most important European country exporting goods and services to Canada and the most important source of European foreign direct investment. In Europe, the UK is the most important export destination for Canadian goods and services and the most important destination of Canadian foreign direct investments.
Representatives of both the UK and Canadian governments have stated their intentions to maintain and even enhance trade relations after Brexit. How can this objective be best achieved?
Download the PDF: Trade Relations between Canada and the UK in the event of Brexit
Abstract of Final Strategic Knowledge Report for SSHRC-ESRC
Armand de Mestral & Lorand Bartels, November 20, 2018
There is every reason to believe that both governments desire to maintain close commercial relations after Brexit, whether this takes place completely on March 29, 2019 or gradually under a phase-in period. They have also stated that they will continue to do what is possible to expand trade relations between them. This is in the interests of Canadians currently having business relations in the United Kingdom and the converse is equally true. Historic ties certainly exist, the Constitution of Canada was shaped by the United Kingdom and is “similar in principle to that of the United Kingdom,” but it would be a mistake to seek the source of this cooperative spirit in nostalgia for Empire or even Commonwealth solidarity. Both countries share a long history of mutually beneficial trade and investment relations and both countries wish to maintain and enhance these relations in their mutual self-interest.
Download the PDF: Abstract of Final Strategic Knowledge Report for SSHRC-ESRC
Memorandum on extending CETA tariff benefits to the United Kingdom after Brexit
Jan Nato, October 24, 2018 - Research memorandum prepared under the direction of Prof. de Mestral
"Canada has signalled its desire to ensure that the United Kingdom continues to benefit from preferential trade arrangements with Canada after Brexit. This may be achieved in one of three scenarios. First, in the case that the UK and the European Union reach a withdrawal agreement which includes a transition period when the UK can continue to benefit from EU trade agreements, Canada has expressed its consent that the UK continue to be treated as a party to CETA. Second, in the case of a hard Brexit, Canada has expressed that it will seek to ensure “a seamless transition of CETA” via a transitional agreement with the UK that could take effect from exit day. Finally, Canada and the United Kingdom have signalled their intent to forge a new bilateral trade agreement."
Where Canada stands as Britain leaves the EU
Armand de Mestral, September 24, 2018, Canadian Lawyer
The United Kingdom government is committed to leaving the European Union on March 29, 2019 — a date that is fast approaching. The preferred scenario is for March 29 to be the formal date of departure, but to facilitate departure with a 19-month phase-in period, so the U.K. can clarify its relationships with third countries such as Canada. So, what does that mean for us?
SSHRC ERCS Strategic Knowledge Project on future Canada-UK Trade Relations
Armand de Mestral, September 20, 2018 - Some notes for a report
Notes on the current legal situation governing trade between Canada and the UK; possible developments as a result of Brexit; necessary actions by Canada; and outcomes desired by both parties.
Brexit Literature Review
Shannon Gallant, August 31, 2018 - Literature review prepared under the direction of Prof. de Mestral
Covers Government-Issued Documents (UK White Papers and Canadian notices regarding CETA and Brexit); Canadian Customs Law (architecture of Canadian Customs Law and how tariffs are encapsulated in federal legislation) and Customs Tariff Analysis (scope of CETA provisions within the Customs Tariff Act and associated regulations. Possible remedies for a ‘hard Brexit’ where the EU has not accepted a transitional application of CETA to the UK).
Download the PDF: Brexit Literature Review - 31 August, 2018
Trade between Canada and the UK after Brexit: Where are We?
Armand de Mestral, August 28, 2018 - Centre for International Governance Innovation (CIGI) blog
"The Government of the United Kingdom (UK) is committed to leaving the European Union (EU) on March 29, 2018 - a date which is fast approaching. The preferred scenario is for March 29 to be the formal date of departure but to facilitate departure with a 19 month phase-in period, within which the UK can clarify its relationships with third countries like Canada. During the phase-in period, it is planned that the EU and other countries will continue to treat the UK as part of its territory, so that many major legislative and regulatory changes will only have to be made after a further 19 months.
But what happens if the UK does not succeed in reaching a withdrawal agreement with the EU and is completely out on March 29, 2019? This raises a host of difficult issues for the UK and for its trading partners like Canada."
Brexit’s Impact Will Reach Overseas
Armand de Mestral, March 13, 2018, CIGI Blog
"If Brexit is reflective of something greater than a purely British malaise, the movement will certainly have implications for Canada. We live in a time of considerable uncertainty about the fate of trade and investment agreements." Keep reading on the blog...
Squaring the Circle: The Search for an Accommodation between the European Union and the United Kingdom
Armand de Mestral, November 30, 2017, CIGI Papers
This paper examines the various options for a new economic relationship that appears to be available at the time of opening negotiations between the European Union and the United Kingdom. Canada’s concerns with respect to an eventual Brexit are considered, as well as the political and economic considerations motivating the European Union and the United Kingdom. This paper argues that the United Kingdom has so far proposed largely constitutional options, but neglected the economic dimensions of the issues posed by Brexit. Various existing models are reviewed. In conclusion, the author argues that if the United Kingdom has no options beyond the free trade model, it would do the rest of Europe and North America a great service by negotiating an Atlantic free trade area.
Download the PDF: cigionline.org/publications/squaring-circle-search-accommodation-between-european-union-and-united-kingdom
Why London Will Run Out of Runway on Trade
Armand de Mestral, May 3, 2017, CIGI Blog
"The Rubicon appears to have been crossed, and the United Kingdom’s exit and re-entry negotiations with the European Union must soon begin. What form should they take? The current assumption is that London must agree on the terms of its withdrawal from the European Union and then immediately begin the even more complex process of defining its future trading relationship with the bloc. It is also assumed that this relationship will take the form of some kind of bilateral free trade agreement (FTA). Implicitly, the suggestion has been that it must be an FTA rather than a customs union, as the United Kingdom wishes to retain the freedom to make trade agreements with other partners — in particular the United States and Canada."
Keep reading on the blog...
What Does Brexit Mean for Canada? A Lot, Unfortunately
Armand de Mestral, March 29, 2017, CIGI Blog
"The Ides of March have come and gone. With a hand-delivered letter to Brussels, Prime Minister Theresa May has served notice under article 50 of the Treaty on European Union (TEU) of Britain’s intention to withdraw. “Thank you and goodbye” was the simple reply of Donald Tusk, the president of the European Council who received the historic missive and will now convene a summit of EU leaders on April 29 to adopt guidelines for Brexit negotiations that are expected to last up to two years."
Keep reading on the blog...
If NAFTA fails, Canada should reach across the Atlantic to the UK
Armand de Mestral, February 13, 2017, LSE Business Review or the London School of Economics blog
An Atlantic Free Trade Agreement would help the countries deal with their NAFTA and Brexit crises, writes Armand de Mestral. The future of the North American Free Trade Agreement is looking increasingly uncertain under Donald Trump as president of the United States. In case NAFTA implodes, Armand de Mestral proposes the creation of the Atlantic Free Trade Area between Canada and the United Kingdom, in a framework involving Europe and the US.
Keep reading on the blog...
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