Why employers shouldn’t expect any new immigration options from a Canada-style trade deal.

27 February 2020

This week marks the publication of the UK Government’s negotiating position on a new trade deal with the EU.  As the UK embarks on negotiations for a new Free Trade Agreement (FTA), employers may be wondering whether a deal could provide a mechanism for additional visa routes for both skilled and lower-skilled foreign workers.


The EU has historically negotiated “association” agreements with third countries which created new rights for non-EU nationals to remain in the EU for work or business purposes. The Europe Agreements signed with eastern bloc countries in the 1990s, which were seen as a stepping stone to eventual EU membership, contained not only the right of establishment for non-EU companies wanting to set up in the EU (and with it the right to transfer staff to the EU) but also the right of establishment for individuals, which enabled them to set up a business in the EU as a right.  The Turkey Agreement, signed in the 1960s (when Turkey was a candidate for membership) and later expanded by various EU Council decisions, also gave rise to new rights for employed and self-employed Turkish nationals.   Could a new EU/UK FTA create similar new immigration opportunities?

The bad news is that any FTA the UK agrees with the EU is unlikely to have any provisions which would create new rights or visa routes to allow more people to come to the UK to work.  That is because the new generation of EU trade agreements with trading partners who don’t intend to join the EU only contain very limited provisions on temporary entry and stay of people for business purposes.

The EU’s Comprehensive European Trade Agreement (CETA) with Canada which came into force in 2017 is held up as the model the current UK Government would like to follow. Recent comments by the EU’s Chief Trade negotiator Michel Barnier cast doubt whether the “ambitious partnership” between the UK and the EU would follow this model. Nevertheless, CETA contains a specific chapter entitled “Temporary Entry and Stay of Natural Persons for Business Purposes”.   This immediately sounds less ambitious than the chapters on “Movement of Workers, Establishment, Supply of Services” which previous EU association agreements contained. CETA in fact only contains very limited provisions on “key personnel” coming as intra corporate transferees, business visitors and to set up subsidiaries, as well as contractual service providing temporary services.  These provisions are aimed at reducing non-tariff barriers that businesses face when trading goods and services and when investing abroad and generally reflect EU commitments under GATS. The EU has indicated in its negotiating directives, issued on Tuesday, that it would like such provisions to be included in any new deal with the UK.

The UK has ratified and where necessary implemented CETA.  What may come as a surprise is that the UK did not amend any of its immigration rules to implement the “entry and stay” provisions in the Agreement.  In fact, the UK (like a number of other EU countries) opted out of introducing new immigration categories and has simply maintained its existing visa categories for the transfer of highly skilled key personnel through the Tier 2 (Intra Company Transfer) rules and those on contractual service suppliers through the Tier 5 (GATS) route. The UK specifically opted out of having to introduce a new “investor” category for those coming to set up a branch of a Canadian enterprise, as this would have required the UK’s Sole Representative category to have been amended to allow majority shareholders to qualify.  The UK’s existing rules are far more generous than the CETA provisions, for example in the context of business visits, where the UK’s rules are more liberal than those of many OECD countries. 

It should also be noted that a CETA-type agreement between the UK and the EU will not provide a solution to alleviate anticipated shortages in lower-paid parts of the economy.  As an example, Youth Mobility/Working Holiday visas don’t get included in FTAs–these are almost always negotiated on a bilateral basis through a Memorandum of Understanding process. It is likely that the UK will have to negotiate Working Holiday arrangements individually with each EU Member State. The Government’s latest policy paper on the future immigration system is entirely silent on any bilateral Working Holiday arrangements with EU countries. The former Conservative Government’s 2018 White Paper proposals that youth mobility should be part of the EU/UK “mobility framework” are unlikely to feature in any Canada-Style Agreement. 

So whether or not the UK gets a CETA-style deal, let’s not get too optimistic about how any ambitious trade deal might alleviate concerns about immigration restrictions after the end of the transitional period. 

About the author

Nick Rollason heads our immigration team and advises on all areas of UK immigration and nationality law. He has particular expertise in providing strategic advice to businesses on their global immigration needs. He is regularly consulted by the UK immigration authorities on proposed changes to the UK immigration rules and policy.

 

 

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