Option 3 Canada plus

What does it involve?

If May won’t budge on her Lancaster House “red lines” – the UK is to be outside the single market and the customs union – the only viable option, says Brussels, would be a free-trade agreement like Canada’s Comprehensive Economic and Trade Agreement (Ceta) with the EU. This would ensure that nearly all goods could be imported tariff-free, and non-tariff barriers (regulatory checks, quota controls) would be kept to a minimum. It would also put an end to budget payments to the EU and free movement for EU citizens. The “plus” signals that the UK deal would go further than the agreement with Canada, though it’s unclear how far: it might involve making it easier for the UK to sell services to the EU and forging other joint arrangements – on security, for example.

Pros and cons of Canada plus

To many Brexiteers it represents freedom – a clean break with Brussels. The European Court of Justice’s jurisdiction over British affairs would end; EU immigration would once agai again be a matter for Parliament. And we’d have com complete freedom to trade freely with the world. Bu But most economists think it would impose a heavy co cost. There’d have to be new customs and “rules of or origin” checks on goods moving over the borders: eve even small amounts of additional border formalities wou would create long queues and uncertainty in ports used fo for UK-EU trade, notably Dover. And it would make k th the need df for some sort of controls at the Irish border almost inevitable. Besides, free-trade deals also take years to negotiate: Ceta took seven years, though presumably a UK deal would be easier, because British and EU regulations are currently identical.

Who supports Canada plus?

Many Tory Brexiteers, such as Jacob Rees-mogg, Johnson and Davis, who pushed hard but unsuccessfully for Canada plus when he was Brexit Secretary. The EU has, in principle, always been open to such an agreement – but, again, it’s subject to a satisfactory resolution on the Irish border. The CBI is dead against it: “It would introduce friction at borders, it would not solve the Irish border, it would damage the supply chains on which thousands and thousands of jobs depend.” And at the moment, there is nothing like a majority in support of it in the Commons.