Friday, 27 July 2018

Friday, 27 July 2018

Which Brexit deal?

With the UK on course to leave the European Union in March 2019, the country faces 4 potential end case scenarios. We have heard about Hard Brexit, Soft Brexit, Customers Partnerships and the Norway model, but realistically there are now only 4 options left.....

Leave with a deal

Both the UK and the EU state they want as amicable a divorce as possible, with a legal agreement setting out the kind of relationship they will have when the UK is no longer a member of "the club".

The Prime Minister's present plan involves close ties with the EU in certain areas, most notably trade in agricultural products and allowing skilled migrants access to jobs in the UK. The plan she says will allow Britain to take back control of its laws, money and borders, as people voted for in the 2016 referendum. But it has been attacked as an unworkable compromise by people from both the "Remain" and "Leave" campaigns. Let's not forget, the EU may also decide to reject it ! Mrs May has appointed herself now as Chief Negotiator.

No deal

A clean break from the EU. Most likely, in this scenario, the UK would fall back on its membership of the World Trade Organization (WTO), the global body governing international trade. UK exports to the EU would be subject to the same customs checks, requirements and taxes that the EU currently imposes on countries like the USA. Many commentators feel that this would be catastrophic for British business. It would probably create chaos at the borders. Not really an acceptable option.

Remain in the EU

The UK triggered the mechanism to leave the EU and the back stop date is 23:00 on 29 March, 2019. A complete U-turn would involve huge loss of political face, and possibly require a new PM, with the backing of voters in a general election. Interestingly, European Council President Donald Tusk has said he believes Brexit can be halted.

A less formal version of staying in the EU would be if the UK manages to strikes a deal that keeps it in the EU's trade arrangements. That is to say the customs union and the single market - and agrees to free movement of people and the jurisdiction of the European Court of Justice. This would amount to staying in the EU, Brexiteers will argue.

Hold another referendum

The UK government has ruled this out but there have been a number of people calling for a fresh vote. Parliament is clearly split over what kind of Brexit it wants. So, a 2nd referendum on the final deal agreed by Theresa May in Brussels might yet end up being the only way to break the deadlock.

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