A Canada+ Brexit deal: what would it mean?

What is Canada+?

The Canada+ (or Canada ++, or Canada +++, or Super Canada, depending on who you ask), refers to a proposed post-Brexit free-trade agreement based on the relationship that Canada has with the EU, with additional trading agreements.

This view is currently championed by some in the Conservative party, such as, David Davis, Sir Bernard Jenkin, Theresa Villiers and others who tend to lie on the right of the party. The European Research Group (the Brexit lobby group headed by Jacob Rees-Mogg), have also created a policy document which outlines the position in greater detail.

A Canada+++ agreement was proposed yesterday by EU Council Chair, Donal Tusk, who said that this offer was a ‘true measure of respect’.

What does this mean for the data and marketing industry?

In amongst the suggestions for a Canada+ agreement is the proposal to create new data privacy laws, which would be less stringent than those required by EU laws such as GDPR.

While it is true that GDPR required significant compliance work for many businesses across the UK, we believe that a slackening of the current UK data protection legislation (Such as the Data Protection Act 2018, which replicates and adds to the GDPR to retain EU alignment post-Brexit) would be an error.

First, our extensive research has shown that businesses agree that GDPR is the best data protection policy for the UK. 78% of marketers believe the best data protection policy for the UK in the future is GDPR.

Our industry has never felt more positive about the long-term impact of GDPR. 32% see the long-term impact of GDPR compliance as positive, with a further 27% saying there has been no impact.

It is evident that current alignment with the EU is preferable. We also know that breaking our alignment agreement with the EU would prevent the UK from reaching a data agreement with the EU, which would end the free flow of data. We found that 51% of marketers are concerned about the financial impact of Brexit making the free flow of data across Europe more difficult.

These findings were obtained when remaining in the digital single market was an option. 89% of marketers wanted to retain access to the ‘digital single market’ post-Brexit. Now that this option is off the table, we know that even more businesses are concerned about the financial implications that would come with a break in the free flow of data post-Brexit.

The UK Parliament’s Exiting the European Union Committee’s report on the post-Brexit data flows echoed our findings. They found that “the flow of personal data between the EEA and the UK is fundamental to the EEA’s and UK’s increasingly digitised, information-driven, economy and society. Cross-border data flows in and out of the UK increased 28-fold between 2005 and 2015 and are expected to grow another five times by 2021. 75% of the UK’s cross-border data flows are with EU countries.”

The government’s response recognised that “achieving a deal on data protection is one of the foundations that must underpin the UK-EU trading relationship. In a globalised digital economy, data flows envelop all trade in goods and services as well as other business and personal relations. They are critical for both sides in a modern trading relationship.”

In sum, our research shows that a Canada-style trade agreement would be detrimental to the data and marketing industry as it current data protection legislation is beneficial to our industry and that the breaking of the free flow of data would carry harmful effects. Anecdotally, we know that a number of brands have started making contingency plans to relocate to the EU in the event of a Canada style deal.

DMA CEO, Chris Combemale said: “A Canada style free trade deal will not be a win for the UK’s creative industries who rely on the frictionless use of data across EU borders. Disrupting the free flow of data and possibly weakening UK data protection legislation will lead to a loss of jobs and investment. UK marketers are emphatic in their support of GDPR with 78% of them believing it is the best policy for the UK”.

The DMA has consistently pushed for a Brexit deal that retains full data alignment, as this would allow businesses in the data and marketing industry to continue accessing markets in which they currently offer world-leading services.

Will it happen?

Theresa May has dismissed this proposal in the past because it does not solve the issue of the Northern Irish Border. An agreement such as this would require goods checks and, thus, a barrier between Ireland and Northern Ireland, which many argue is a breach of the Good Friday Agreement.

The government say it would also subject the UK to EU tariffs, which, in spite of the fact we can apply our own tariffs too, gives us less control and is less ideal than a tariff-free trading agreement.

Donald Tusk’s advocating of this agreement may place some pressure on the Government. After releasing his statement, Jacob Rees-Mogg hailing it as "a good solution for everyone" and David Davis concluding it shows No 10's claim there is no alternative to Chequers "is just wrong".

However, these ‘Chequers chuckers’ do not wield real decision-making power. They can vote down the Chequers deal in the commons and push for a no-deal (as Jacob Rees-Mogg and ERG supporters say they will), but only the government can actually articulate the kind of agreement it wishes to pursue with the EU. As such, the government would need to endorse and propose a Canada+ deal in order for it to have a chance of becoming the final EU-UK agreement.

The only instance in which this may happen is if the government cannot pass the Chequers deal, (which is likely), and the government then choose to adopt and propose this agreement (probably after an extension of the negotiating period) rather than choose to extend the voting period and re-negotiate on different terms; call a general election; or call a people’s vote.

This seems more likely than the latter two options, but less likely than the government trying to go back to the negotiating table and exploring other options in the event of Chequers failing to pass through the Commons.