Trade after Brexit. Options for the UK’s relationship with the EU

Author (Person)
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Series Details December 2017
Publication Date 18/12/2017
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The United Kingdom published two White Papers on the 9 October 2017, which set out its vision for post EU trade and customs policy once the UK had withdrawn from the European Union.

In Preparing for our future UK trade policy the Department for International Trade established the principles that would guide future UK trade policy as well as laying out the practical steps that would support those aims.

These included:

+ taking steps to enable the UK to maintain the benefits of the World Trade Organisation’s Government Procurement Agreement
+ ensuring the UK could support developing economies by continuing to give them preferential access to UK markets
+ preparing to bring across into UK law existing trade agreements between EU and non-EU countries
+ creating a new, UK trade remedies investigating authority

The UK Government also published on the 9 October 2017 a separate White Paper Customs Bill: Legislating for the UK’s future customs, VAT and excise regimes.

The White Papers were published on the same day as the start of the fifth round of Brexit negotiations between the EU and the UK in Brussels.

On the 7 November 2017 a Trade Bill entered Parliament (with a Customs Bill to follow), to set the groundwork for the UK to become an independent global trading nation.

Key measures in the Trade Bill included provisions for the UK to implement existing EU trade agreements, helping ensure that UK companies could continue to access £1.3 trillion worth of major government contracts in other countries and creating a new trade remedies body to defend UK businesses against injurious trade practices.

Further tax-related elements of the UK’s trade policy would be legislated in the HM Treasury’s Customs Bill – Taxation (Cross-border Trade) Bill – as part of the creation of a new UK tariff regime. This included the trade remedies and unilateral trade preferences which provide preferential trade access to UK markets for developing countries.

Following the European Council held in Brussels on the 14-15 December 2017 the EU27 grouping (the EU Member States minus the United Kingdom) held a separate European Council (Art.50) on the 15 December 2017.

The EU27 reviewed the latest developments in the Brexit negotiations.

EU27 leaders agreed that sufficient progress has been achieved in the first phase of the Brexit negotiations.

On this basis, they adopted the draft guidelines to move to the second phase of negotiations where they would also start discussions on:

+ a transition period
+ the framework for the future relationship (including trade).The Institute for Government (IfG) published a report called Trade after Brexit. Options for the UK’s relationship with the EU in December 2017.

Brexit meant that, for the first time in 40 years, the UK would have to renegotiate its trade and economic relationship with its largest trading partner. This paper set out the key options and trade-offs for the UK Government in negotiating its future trade relationship with the EU.

The European Commission had suggested that the UK faced a choice for its trading relationship post-Brexit – to become a rule taker with full market access like Norway, or have a standard free trade agreement like Canada.

The UK had rejected this 'stark and binary choice' between two existing models, calling for a bespoke free trade agreement. This paper asked what the scope was to negotiate an arrangement between Norway and Canada, and highlighted the key choices and trade-offs that needed to be made. The Government needed a positive proposal which recognised EU concerns and constraints. And it must build support for this proposal with the rest of the EU member states.

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Related Links
ESO: Find further information in ESO on After Brexit and Future Trading Relationship
Politico, 12.12.17: Michel Barnier: Full trade deal impossible by Brexit date
The Conversation, 09.01.18: No Liam Fox, the UK should not join TPP – here’s what priorities should be
ESO: In Focus: Brexit - The United Kingdom and the European Union
IfG: Publications: Trade after Brexit, Options for the UK's relationship with the EU, December 2017

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