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This interactive diagram presents the following options for UK Brexit.

enter image description here

These options being:

  1. Status Quo (Prior to Brexit)
  2. Softest Brexit
  3. Soft Brexit
  4. Hardish Brexit
  5. Hard Brexit
  6. Cliff Edge

I believe an option was chosen - I just don't understand which one they ended up with.

My question is: Which Brexit option did the UK end up with?

  • 3
    It hasn’t chosen anything yet. In fact, it appears the cabinet members are divided on what to choose. – chirlu Dec 14 '17 at 3:14
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    Thanks that's helpful - to help me update the question - do we have a date on when they have to decide? – hawkeye Dec 14 '17 at 3:17
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    When the EU was informed of the brexit vote, it set 29 march 2019 as the date when Britain will formally exit the EU. Britain has time till then to broker an agreement on trade, economic and other policies. theguardian.com/politics/2017/nov/16/…. This site may help you understand it better. – Shantanu Hebbar Dec 14 '17 at 7:31
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    @ShantanuHebbar: The EU did not set the date for Brexit. The UK government did, by formally notifying the EU it was triggering Article 50 of the Lisbon Treaty. It did so on 2017-03-30, and the treaty specifies that exit takes place two years after notification, hence on 2019-03-29. – Royal Canadian Bandit Dec 15 '17 at 14:02
  • There is another option discussed: Backing from Brexit and thereby giving up the [Thatcher rebate]( en.m.wikipedia.org/wiki/UK_rebate) and henceforth work in a constructive way with the EU instead of blocking stuff all the time. At least according to German newspapers, it's on the table in Brussels. – Philip Klöcking Dec 15 '17 at 23:18
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Default to soft Brexit

No final decision has been made. But the Stage 1 Agreement in effect specifies soft Brexit as a default. From the official text:

  1. The United Kingdom remains committed to protecting North-South cooperation and to its guarantee of avoiding a hard border. Any future arrangements must be compatible with these overarching requirements. The United Kingdom's intention is to achieve these objectives through the overall EU-UK relationship. Should this not be possible, the United Kingdom will propose specific solutions to address the unique circumstances of the island of Ireland. In the absence of agreed solutions, the United Kingdom will maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation, the allisland economy and the protection of the 1998 Agreement.

[emphasis added]

Exactly what "full alignment" means has not been fully defined. But to maintain an open border without customs checks, the UK would in effect have to remain within the EU customs union and comply with large areas of EU regulation.

Hard Brexit is still possible

The above situation is unlikely to be acceptable to proponents of hard Brexit in the UK. There are at least three ways hard Brexit could still take place:

  1. The UK could find some clever way to diverge from the EU while safeguarding the open NI border. These are the "agreed solutions" mentioned in the text. However the UK tried and failed to get the EU to agree to this route in preliminary negotiations, so it is unlikely to resolve the border issue altogether.

  2. Impose customs checks between NI and the rest of the UK. In logistical terms this is entirely possible, and would allow the rest of the UK to go its own way. It is adamantly opposed by the DUP, on which Theresa May depends for her parliamentary majority. However a new election or other developments might make this option feasible. (If enacted it would also create second-order complications, such as Scotland demanding similar special treatment to NI.)

  3. No-deal Brexit. If the UK fails to agree an exit deal with the EU, then by definition it will be outside all EU institutions. A hard border will be imposed in Ireland, likely with serious consequences for the peace agreement. Many would not consider this a good outcome, but it is certainly possible.

  • That commitment is to maintain alignment only on "the rules of the customs union and the internal market which support North-South cooperation, the allisland economy and the protection of the 1998 Agreement." that doesn't mean remaining inside them in their entirety. – JeffUK Dec 15 '17 at 17:40
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    @JeffUK: True. But rules which affect "the allisland economy" cover a very wide range. In particular, the UK couldn't have different external tariffs, which effectively keeps it in the customs union. – Royal Canadian Bandit Dec 16 '17 at 15:42
  • They could well have different external tariffs, if some way could be find to protect the 1998 agreement. In which we only ever committed to use "best endeavours" to reach agreement on the adoption of common policies, – JeffUK Dec 16 '17 at 17:08
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    @JeffUK: The UK could have higher tariffs (the EU won't have a problem with that) but the UK cannot have lower tariffs (as that would provide a benefit to the UK which the EU won't accept). But there is no point in the UK having higher tariffs if they're trivially bypassed by importing via Ireland. – MSalters Dec 20 '17 at 11:27
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Nothing has been decided. The UK cannot decide by itself. The process is one of negotiation, and there are two parties (or 28 by some counts).

The UK government has indicated its intention to try to negotiate a Free-Trade deal. In the absence of such a deal, the UK has indicated that it will keep its regulations "aligned" to the EU, so that border posts will not be needed along the Irish border.

The meaning of "aligned" is unclear.

The UK has also ruled out joining the customs union or the EEA.

Perhaps the most likely outcome is some form of Free-trade agreement. It does not seem likely that there is sufficient time to negotiate this. Hence there will likely be a transitional arrangement, modelled on the current rules for trade, perhaps with the UK effectively remaining in the Single Market during the period (although perhaps under a different name).

It is also quite possible that there will be a change of government in the next year. This would change everything, as Labour has quite different priorities for the transition negotiations.

Unless the UK and EU decide to delay, the UK will leave the EU on the 29th of March. An agreement, at least on the transitional arrangements, needs to be in place well in advance of this.

After the UK government has made a draft Trade and Exit deal with the EU, but before the 29th March, the deal will be submitted to Parliament for approval. In the case that Parliament does not approve the agreement, there would have to be further talks. There may also need to be approval from the various legislatures of the EU 27. The EU-Canadian Deal had to be modified after one of the Belgian regional Parliaments voted against it. Parts of the deal can be approved by a qualified majority, other parts require unanimity among the EU members, as determined by their own internal procedures. If the deal is rejected, and the UK exits without a deal, the declared intention is for "alignment".

  • Note that "UK" in this answer means the UK government (i.e. the executive), which may not be the body making the final decision, since it appears the parliament (i.e. the legislature) will also have a chance to reject any deal. What such a rejection would mean is also unclear. – origimbo Dec 14 '17 at 18:42
  • It is worth noting the agreement qualifies the alignment. "the United Kingdom will maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation, the all-island economy and the protection of the 1998 Agreement." - So if there are rules which don't affect those items (and evidently the authors thought there might be), those rules might not be aligned with. – RedGrittyBrick Dec 15 '17 at 17:03
  • @RedGrittyBrick: There are definitely EU rules which are irrelevant here, e.g. the special rules for Outermost Regions (affect France, Portugal, Spain). And while the Overseas Countries & Territories include former British colonies, I don't think those treaties affect the NI border either. – MSalters Dec 20 '17 at 11:35
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The recent Stage 1 agreement, which the EU is requiring to be written and committed to before stage 2, mandates a soft Brexit. Exactly what type remains to be seen, but the UK government committed to keeping alignment with the single market and customs union, so even if it isn't technically in them it's still basically in them.

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I think Mrs. May wants another box to be added to that diagram. Whether she achieves it or not is debatable. She wants to have a free trade agreement (like Canada) that includes goods AND services (generally FTA's cover just goods) while providing the freedom for the UK to negotiate its own free trade agreements.

Apparently CETA covers 98% of tariff areas - so it's pretty comprehensive on goods (and the Canadians don't have to pay or accept the four freedoms).

As to "regulatory alignment", it's worth remembering that anyone who exports goods or services to another country has to abide by the rules of that other country and vice versa for imports.

And even within the EU countries have some regulatory divergence. For example, power plugs in the EU and the UK and Ireland are different.

Ireland and Northern Ireland also already share common regulatory alignment (i.e. different from the rest of the UK) in a few areas, for example on phyto-sanitary matters, so there are already special arrangements in a number of areas for Northern Ireland.

The question is to what degree and how the UK implements EU regulations in a post-Brexit world, and what organizations are used to implement those regulations. Either way, it isn't tough to see the UK implementing some regulatory framework that retains regulatory equivalence.

Even with WTO terms (the so called "hard Brexit"), the economic costs or tariffs are not that great and would be discounted before the exit day by revaluation of the currency. In other words for the population as a whole there really is no "cliff edge". (Doesn't mean there aren't those who would suffer significantly - but there would be others who benefit significantly).

Approximately 28% of UK GDP is from exports or which EU exports amount to 43% or 12% of the total. It follows that even with EU tariffs at WTO rates (average 4%) the overall impact is minimal on the economy as a whole, and the UK would have the option of reducing tariffs on imported food, clothing and footwear. Imported vehicles from outside the EU might also have reduced tariffs by up to 10%.

The problem comes from non-tariff barriers, and here some agreement is needed between the EU and UK in order to avoid craziness on the exit day if there was no deal. It seems almost inconceivable that some accommodation on aviation etc. would not be found but in areas that are more commercially sensitive there could be an impact.

Since the development of the WTO the economic benefits of the EU are questionable (there is always that net payment of 12 billion to outweigh any advantages), and the main reason to stay is political and social.

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