Quebec, Scotland, and substate governments’ roles in Canadian and British trade policy: Lessons to be learned
| Author | Ian Wooton,Graeme Roy,X. Hubert Rioux,David Eiser,Stéphane Paquin |
| Date | 01 March 2021 |
| DOI | 10.1177/0020702021992856 |
| Published date | 01 March 2021 |
| Subject Matter | Scholarly Essay |
Scholarly Essay
International Journal
Quebec, Scotland, and
2021, Vol. 76(1) 85–105
! The Author(s) 2021
substate governments’
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Lessons to be learned
St
ephane Paquin
E´cole nationale d’administration publique, Canada
X. Hubert Rioux
E´cole nationale d’administration publique, Canada
David Eiser
Fraser of Allander Institute, Department of Economics,
University of Strathclyde, Scotland, UK
Graeme Roy
Fraser of Allander Institute, Department of Economics,
University of Strathclyde, Scotland, UK
Ian Wooton
Fraser of Allander Institute, Department of Economics,
University of Strathclyde, Scotland, UK
Abstract
Following Brexit (the withdrawal of the UK from the EU and the European Atomic
Energy Community at the end of 31 January 2020), the British government stated that it
hoped to reach a new trade agreement with Canada to be modelled after the Canada–
EU Comprehensive Economic and Trade Agreement, the first free-trade deal for which
Corresponding author:
Stephane Paquin, E´cole nationale d’administration publique, 4750 Henri-Julien Montreal, Montreal, Quebec,
Canada H2J 3T1.
Email: stephane.paquin@enap.ca
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International Journal 76(1)
Canadian provinces were directly involved at every stage of negotiations. In the UK,
while there are mechanisms for the involvement of devolved regions in European policy,
there is no clear constitutional doctrine as to the roles they should play in elaborating
trade policy more generally. Moreover, the asymmetric nature of the UK’s devolution
system complicates the involvement of its devolved governments in trade negotiations.
By providing a specific focus on the cases of Quebec and Scotland, this article provides
a comparison of substate governments’ roles in trade negotiation and trade promotion.
It concludes that, while there seems to be only limited scope for substate governments’
formal input into future trade negotiations, their trade and investment promotion
organizations allow them to pursue different objectives over trade outcomes within a
unified national framework.
Keywords
Trade negotiations, federalism, devolved regions, Scotland, Quebec
Having formally left the EU, the UK reached a “transitory” trade agreement with
Canada in late 2020, modelled after the Canada–EU Comprehensive Economic
and Trade Agreement (CETA) and to be followed in 2021 by negotiations for a
new bilateral free-trade deal between the two countries. In the more than forty
years since the UK last negotiated a trade deal—as opposed to the negotiations having
been led by the EU on its behalf—its constitutional arrangements have evolved sub-
stantially, with devolved legislatures being established in Scotland, Wales, and
Northern Ireland in 1999. The UK’s future trade agreements have implications for
these legislatures, not least because they will impact a whole range of devolved policy
responsibilities. As a result, all three have made the case that they should have a
formal role in the development and negotiation of future UK trade agreements.
This argument has been made particularly forcefully by the Scottish government
(SG), which argues that it should have a formal role in all stages of negotiations,
from the formulation of negotiating mandates to treaty ratification.
Canada and the UK share many of the same constitutional principles. Even
though the federal setting of Canada contrasts with the UK as a unitary state
characterized by a very asymmetric devolution system, in both countries’ trade
negotiations and ratification are reserved to the central government. And in both
countries the second chamber of the central government also does not play the role
of a representative of the substate governments. Moreover, neither Quebec nor
Scotland has the ability to veto a trade negotiation conducted by Canada or
Britain, respectively. In Canada, the Canadian provinces can only refuse to imple-
ment the agreement in their areas of jurisdiction. In the UK, the devolved
institutions have no formal role in co-determining trade policy, and there is no
requirement for them to even be consulted.
Paquin et al.
87
Nevertheless, the two countries are contrasting cases for the fundamental issue
of the role of substate governments’ participation in trade negotiations. In Canada,
a practice established since the 1980s gives an important role to the Canadian
provinces. In the CETA negotiations, Canadian provinces even had access to certain
negotiating tables. That being said, while Canada’s CETA experience has frequently
been hailed as a paragon of subnational involvement, it is not necessarily typical of
the roles of Canadian provinces. One area of greater similarity between the UK and
Canada is the role that the devolved and provincial governments, respectively, play
in stimulating exports and encouraging inward investment via subnational trade and
investment promotion organizations (TIPOs). These agencies’ knowledge about
exporter and investor needs could indeed become valuable in maximizing the ben-
eficial outcomes of future trade negotiations.
The aim of this paper is thus to explore these differences and similarities, to find
out what has worked, what has not, and what lessons from the Canadian experi-
ence could be applied more broadly to the UK. We provide a comparative analysis
both of the motivations of Quebec and Scotland to become engaged in interna-
tional trade agreements and of the factors that determine the extent to which the
subnational governments can influence the outcomes of such agreements. We draw
from published materials, government documents, parliamentary statements, and
formal and informal interviews with civil servants from Scotland and Quebec. In the
case of Canada, semi-structured interviews were conducted throughout the CETA, the
Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP),
and the Canada–United States–Mexico Agreement (CUSMA) negotiations with offi-
cials, advisors, and experts from Ottawa, Quebec, and the EU who were directly
involved in negotiations.
With such a specific focus on the cases of Quebec and Scotland, and by adding
the angle of trade and investment promotion to the more traditional analysis of
multi-level governance and trade policy, this article provides a comprehensive
comparison of the two systems across policy sectors. Our argument is that,
although they have historically been overlooked in the conduct of international
trade negotiations in multi-level settings, subnational trade and investment pro-
motion networks are particularly well-developed in both Quebec and Scotland
and would therefore be well placed to inform subnational but also national
governments and trade negotiators of the market gaps and opportunities that
future trade agreements should address. We therefore conclude that, while there
seems to be only limited scope for formal subnational input into future trade
negotiations led by Canada or the UK as a whole, TIPOs do provide effective
avenues through which different objectives over trade outcomes can be achieved
at the subnational level.
Literature Review
International trade negotiations address increasingly sensitive issues for substate gov-
ernments, such as government procurement, regulatory cooperation, services, public
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International Journal 76(1)
health, diversity of cultural expressions, business subsidies, investor–state dispute
settlement, removal of non-tariff barriers, agriculture, labour mobility, and the envi-
ronment.1 In this context, substate governments are aware that their constitutional
jurisdiction and ability to formulate and implement policy depends on these trade
agreements. Increasingly, therefore, some substate governments want to be included
in the multi-level dynamics of trade negotiations.2 The lessons from the CETA nego-
tiations also confirm that substate governments are important actors in legitimizing
trade deals because, when they oppose such agreements, as in the Walloon case, they
jeopardize the negotiations and risk provoking chain reactions.3
In the international political economy literature on trade negotiation, a
frequent opposition to the inclusion of substate governments comes from Fritz
Scharpf’s concept of the “joint decision trap.”4 Following this perspective in
terms of trade negotiations means that substate governments should find it easier
to agree on the lowest common denominator or to advance their defensive interests,
thereby encouraging protectionism. Freudlsperger argues, however, that the partic-
ipation of Canadian provinces in the negotiation of CETA invalidated this perspec-
tive.5 During these negotiations, for instance, Canadian provinces proposed the
most important concessions in their history in the area of public procurement.
Another important theory states that there is an asymmetry, in the EU context,
between the means of influence of regional authorities in federated states and the
results of trade negotiations.6 The substate governments that have the most power
to influence trade negotiations are those of Belgium. Since they participate in the
Belgian delegation to the European Council, they can influence the European
Commission. They can also threaten to use their veto and block Belgium’s approv-
al process, as the Walloon Region did with CETA, supported by the Brussels-
Capital Region and the French Community of Belgium. To resolve the problem of
the Walloon blockade, many concessions were made by the...
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