Brexit- what the future may look like

Following the UK decision to leave the EU a week ago, there has been much discussion as to how our relationship with eh EU will look after all negotiations have been made.

Looking at other countries, there are three models that are possible that have differing effects on the country. While nothing is decided and there is still a level of uncertainty, it is a good idea to become familiar with what is possible to enough you and your business is ready.

The Norway model

This option will see the UK as part of the European Economic Area but not the EU.

Norway negotiated its entry into the EEA in the 1990’s for its future entry into the EU which was later blocked by the Norwegian electorate.

As part of the EEA, Norway has full access to the EU single market, with minor exceptions. For this, they make a substantial contribution to the EU budget and accepts the free movement of workers and compiles with a large amount of EU legislation. However, a key part that is missing is the ability to have a say on the EU legislative or decision making process.

Therefore, if the UK goes with this option, the position will be largely unchanged, but we will no longer have a say on what EU legislation can affect us.

The Canada model

Following this model, we will create a bilateral agreement.

The agreement made between the EU and Canada was a bilateral trade deal which is in relation to the majority of goods and a number of services. This agreement has been newly created and still requires a number of states to ratify it but it demonstrates the option to create a purely trade agreement. This di however take seven years so could be a long winded option.

In addition to this trade agreement, Canada has also agreed to comply with EU safety and other exportation guidelines to ensure that any dealings they have will be of the correct standard of safety.

If the UK were to favour this option, it is unknown what the EU will require the UK to do to allow access to the Single market to trade. It could be possible that free movement of workers will be needed amongst other requirements.

The WTO fall back

If all other negotiations fail and no agreement can be made, the UK will have to rely on their membership of the World Trade Organisation. This allows members to trade with the other 150 member countries.

This, however would not be ideal as puts a number of restrictions on the way we will trade with member states.

The WTO require that a member must offer the same trade terms as those they wish to trade with across all members. Therefore, there cannot be differing tariff levels between members of the WTO. This could be a big disadvantage and would not give the same level of trade as is the case now. However, this option des mean the UK will not have to accept any free movement of workers provisions to gain a trade agreement with the EU.

For more information or guidance on how to prepare your business for the effects of Brexit, contact Lawdit Solicitors.

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