Brexit scenarios

Publication | July 2018

Subject to the outcome of any negotiations, the UK might adopt a number of models, including one (or a bespoke model based on one) of the following five:

For further insight and commentary on the UK’s latest proposals for a future EU-UK relationship, please visit the UK and EU legal framework section of our Inside Brexit blog.

EEA + EFTA Customs union Bilateral accords + EFTA FTA WTO
EEA + EFTACustoms unionBilateral accords + EFTAFTAWTO

The UK could join the European Economic Area (EEA) and the European Free Trade Association (EFTA) and continue to have full access to the single market. It would have to adopt EU regulations and standards. Norway also co-operates with the EU on a broad range of policy areas through the EEA agreement and other bilateral agreements.

The EEA was established in 1994 and three EFTA states (Norway, Iceland and Liechtenstein) are currently members.

The UK could enter into a customs union with the EU. Goods could be exported to the EU without tariffs or customs restrictions, but the UK would be required to comply with various areas of EU regulation. Many sectors may be excluded from a customs union and services, including financial services, may not be covered at all.

A customs union has been in place between the EU and Turkey since 1995.

The UK could agree a set of bilateral agreements governing access to the single market, sector by sector. It would not get full access to the internal market but would also not be required to comply with EU law except in relation to exports and investments into the EU. The UK could also become a member of EFTA.

Switzerland is a member of EFTA and has negotiated a special relationship with the EU through various bilateral accords and trade treaties.

The UK could agree its own free trade agreement with the EU. This could lead to a single comprehensive deal rather than piecemeal agreements. It could potentially involve greater continuity of the single market at the cost of political autonomy.

The free trade agreements between Canada and the EU (and the Ukraine and the EU) provide useful models of how a bespoke free trade agreement might work.

The UK could rely on existing World Trade Organization (WTO) rules and there would then be no negotiations for new agreements between the EU and the UK. The UK would gain full autonomy over its trade policy. However it would no longer have dual representation as both the UK and as a member of the EU.

China joined the WTO in 2001 after 15 years of negotiation. China is currently the EU’s biggest trading partner after the US.

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