The House of Lords EU internal market and external affairs sub-committees have published a report advising the government to seek a transitional trade arrangement after the UK leaves the EU, involving a temporary extension of participation in the customs union. Key findings of the report, ‘Brexit: the options for trade’, based on the four main options for the UK’s trade relationship with the EU after leaving are:
The European economic area (EEA) is the least disruptive option for trade, but it is unlikely to be reformed to limit free movement or give the UK voting rights on EU legislation.
The government urgently needs to decide whether or not the UK will remain in a customs union with the EU. Doing so would mean no border checks for goods between the UK and EU, but would restrict the UK’s ability to sign trade deals with the rest of the world. It does not cover services.
A free trade agreement (FTA) with the EU is the most flexible option and could lead to a bespoke deal, but would be complex and take longer than two years to negotiate. Even the most advanced FTAs do not provide terms for UK–EU trade equivalent to membership of the single market.
Trade under World Trade Organisation (WTO) rules would have the most dramatic effect on trade, resulting in significant tariffs for goods and increased restrictions on services. Establishing independent WTO schedules will not be straightforward.
Chairman of the EU external affairs sub-committee, Baroness Verma, said: ‘It is unlikely that a bespoke EU trade agreement can be agreed within article 50’s two-year period, so a transitional deal is vital for protecting UK trade, and jobs that rely on trade.’
Lord Whitty, chairman of the EU internal affairs sub-committee, said: ‘Trade-offs will need to be made in whatever trading framework we eventually agree. The government is committed to curbing the free movement of people and the reach of the European Court of Justice. This is incompatible with full single market membership.’
The House of Lords EU internal market and external affairs sub-committees have published a report advising the government to seek a transitional trade arrangement after the UK leaves the EU, involving a temporary extension of participation in the customs union. Key findings of the report, ‘Brexit: the options for trade’, based on the four main options for the UK’s trade relationship with the EU after leaving are:
The European economic area (EEA) is the least disruptive option for trade, but it is unlikely to be reformed to limit free movement or give the UK voting rights on EU legislation.
The government urgently needs to decide whether or not the UK will remain in a customs union with the EU. Doing so would mean no border checks for goods between the UK and EU, but would restrict the UK’s ability to sign trade deals with the rest of the world. It does not cover services.
A free trade agreement (FTA) with the EU is the most flexible option and could lead to a bespoke deal, but would be complex and take longer than two years to negotiate. Even the most advanced FTAs do not provide terms for UK–EU trade equivalent to membership of the single market.
Trade under World Trade Organisation (WTO) rules would have the most dramatic effect on trade, resulting in significant tariffs for goods and increased restrictions on services. Establishing independent WTO schedules will not be straightforward.
Chairman of the EU external affairs sub-committee, Baroness Verma, said: ‘It is unlikely that a bespoke EU trade agreement can be agreed within article 50’s two-year period, so a transitional deal is vital for protecting UK trade, and jobs that rely on trade.’
Lord Whitty, chairman of the EU internal affairs sub-committee, said: ‘Trade-offs will need to be made in whatever trading framework we eventually agree. The government is committed to curbing the free movement of people and the reach of the European Court of Justice. This is incompatible with full single market membership.’
