Which Model for Brexit?

Abstract

The UK government is still considering its options for its future relationship with the EU. While the Prime Minister, Theresa May, has said that there is no suitable “off-the-shelf” model for this, there are several models that are much discussed and serve at least as references when evaluating the pros and cons of various approaches. The models under debate so far (called in shorthand WTO, Norway, Switzerland, Turkey and Canada) have their respective qualities, but they also entail serious drawbacks from a UK standpoint. There is a new model that has so far been ignored in the debate, namely the Association Agreements, which include Deep and Comprehensive Free Trade Areas (DCFTAs), between the EU and Ukraine, Georgia and Moldova, which came into force earlier in 2016. Like the other models, it is obviously not for outright copying, but it has some important features that are likely to be of interest to the UK.

The plan for Brexit was not made much clearer by the British government in its White Paper of 2 February 2017, or its Article 50 declaration of 29 March. It is said that there should be a deep and special partnership, and seamless free trade, while at the same time leaving the single market and Customs Union. This sounds like a contradiction and seems to indicate that the government has not yet (as of July 2017) been able to make up its mind. Undoubtedly a deep free trade deal would for the EU be conditional on the UK undertaking extensive and legally binding commitments on matters of market law. The EU side will not accept a package that seems to make the secession process an easy one for others to follow. Moreover, in the event of a negotiating impasse at the end of the two-year period set by Article 50, the “guillotine” could fall with the risk of imposing greater costs on the UK than on the EU.