UK looks to Brexit with hard and soft choices
Three months on from the EU referendum, Theresa May has finally supplied a date – March 2019 – when the UK’s withdrawal from the European Union is likely to happen. But debate is raging about exactly what will happen when Brexit comes. Andrew Woodcock exa
SOFT BREXIT...
A “soft” Brexit would leave the UK’s relationship with the remaining EU countries as close as possible to the existing arrangements, and is preferred by many of those who campaigned for Remain in the referendum.
The UK would no longer be a member of the EU and would not have a seat on the European Council, where decisions about the bloc’s laws are made. It would lose its MEPs and its European Commissioner.
But it would keep unfettered access to the European single market. Goods and services would be traded with the remaining EU states on a tariff-free basis and financial firms would keep their “passporting” rights to sell services and operate branches in the EU.
And Britain would remain within the EU’s customs union, meaning that exports would not be subject to border checks to ensure they comply with European rules on things like safety standards and country of origin.
At the moment, the non-EU members of the European Economic Area – Norway, Iceland and Liechtenstein – enjoy this status.
In return, these countries are required to make payments into EU budgets and, crucially, to accept the “four freedoms” of movement of goods, services, capital and people.
They are subject to EU law through the Luxembourg-based EFTA Court. Switzerland has a similar arrangement by virtue of a series of regularly updated treaties.
It is thought likely that any “soft Brexit” deal would see the EU insisting on Britain too observing the four freedoms, meaning continued free access for European nationals to work and settle in the UK.
HARD BREXIT...
A “hard” Brexit would see the UK give up full access to the single market and membership of the customs union along with membership of the EU.
Favoured by fervent Brexiteers, the arrangement would speed up the withdrawal process and give Britain full control over its borders, its ability to strike new trade deals and the application of the law within its territory.
Initially at least, it is likely that the UK would fall back on World Trade Organisation rules for trade with its former EU partners, as well as around 50 countries around the globe with which the EU has free trade deals.
This could see British goods and services subject to tariffs, adding 10% to the cost of exported cars for example, while sectors such as agriculture could lose protections against cheap imports from abroad.
And leaving the customs union would mean a significant increase in bureaucratic checks on goods passing through ports and airports.
Over time, the UK could be expected to seek new free trade deals with countries around the world to minimise tariffs and non-tariff barriers, though nations such as the US and Australia have said that reaching an agreement with the EU will take priority. In her speech to the Conservative conference in Birmingham, Mrs May insisted that the choice between “hard” and “soft” Brexit is “a false dichotomy”.
She said she will negotiate a deal for Britain which will restore UK control over immigration and the independence of its judicial system from the European Court of Justice, while maintaining free trade in goods and services and the “maximum freedom” for British companies to operate in EU markets.
Although no country has yet managed to secure an arrangement of this kind, Mrs May maintains that the UK’s position as the EU’s secondlargest economy and its biggest financial centre, a leading member of Nato with a seat on the G7 and the UN Security Council, give it the clout it needs to negotiate a unique “bespoke” deal unlike those on offer to smaller countries.
Her supporters argue that access to the UK market is such a prize for EU nations that they will be ready to accept compromise on freedom of movement.
But critics argue that making a special case for Britain would send an unhelpful signal to other EU states that there is a pain-free route on offer to shaking off the burdens of full membership – something which EU institutions and powerful nations such as Germany are keen to avoid.