POTENTIAL MODELS OF A NEW RELATIONSHIP BETWEEN THE U.K. AND EU

Model Access to Single
Market?
Regulatory
Restrictions?
Free Movement
of People?
EU Legislation? Impact on Your Business?
European Economic
Area Agreement

e.g., Norway
Yes — Free movement
of goods, services and
capital.
Harmonized product
standards and service
regulations.
Yes — Free movement
of people would
continue.
U.K. would still be
required to adopt
much EU law.
  • Least impact for businesses. Regulation and legislation in
    areas of competition law, consumer protection and
    environmental policy are unlikely to change.
Multiple
Bilateral
Accords

e.g., Switzerland
Only in specific sectors
covered by bilateral
agreements.
U.K. would need
to comply with EU
regulatory requirements
for exports to EU.
Yes — Likely U.K.
would still have to sign
up to free movement
of people.
The U.K. would need
"equivalent" laws to EU in
areas such as consumer
protection, competition law
and environmental law.
  • Exports to EU would be more costly for businesses not
    covered by a bilateral agreement.
  • Sectors covered by bilateral agreements may feel only
    minimal impact in the long term. However, it would take time
    to negotiate each agreement, causing disruption.
Customs
Union

e.g., Turkey
Yes for goods but not
for services. Would
have to impose the EU
common tariff.
U.K. would need
to comply with EU
regulatory requirements
for exports to EU.
No — U.K. could set
own immigration
policy.
The U.K. would need to
harmonize laws in areas such
as competition, intellectual
property and consumer
protection.
  • Could severely affect U.K. businesses exporting services to
    EU, for example, financial services and banking industries.
  • U.K. may impose tighter immigration controls, restricting
    access to European labor market.
Free Trade
Agreement (FTA)

e.g., Singapore,
Canada,
South Korea
Potential access to
whole or part of single
market, depending on
the agreement.
FTAs are usually
designed for free
trade in products
rather than services.
U.K. would need
to comply with EU
regulatory requirements
for exports to EU.
No — U.K. could set
own immigration
policy.
No requirements
to follow
EU legislation.
  • Flexibility to legislate and regulate means U.K.
    businesses could benefit from removal of burdensome
    regulations.
  • U.K. may relax some statutory employment laws.
  • U.K. companies exporting to EU could face having to
    satisfy two sets of product standards/regulations.
  • An FTA which does not include services would severely
    affect the U.K. financial services industry.
  • Tighter immigration controls would limit access to EU
    labor.
World Trade
Organization

e.g., Current
situation between
EU and USA
No — U.K. exports to
EU would be subject
to the EU's common
external tariff.
U.K. would need
to comply with EU
regulatory requirements
for exports to EU.
No — U.K. could set
own immigration
policy.
No requirements
to follow
EU legislation.
  • Lack of access to single market would make exporting
    goods and services to EU more costly.
  • Business could benefit from potential relaxation of
    some U.K. statutes and regulations as with an FTA.
    However, may have to face the costs of meeting two sets
    of regulations if exporting to EU.
  • Tighter immigration controls would limit access to EU
    labor.