The IoD has produced the definitive report on British business and Brexit. Titled, Navigating Brexit: Priorities for business, options for government, you can read it in full here.
One of the most complicated aspects of Brexit has been trying to fathom which trade agreement works best for the UK, particularly given the unprecedented nature of a country leaving the EU.
Allie Renison is the IoD’s Head of Europe and Trade Policy. In Navigating Brexit she puts forward the case for the UK to rejoin the European Free Trade Association (EFTA) while outlining tradeoffs for other types of models.
‘The IoD urges urge the government to consider the merits of rejoining EFTA, although this is not to suggest that this should be a basis for negotiating trade relations with the EU in the first instance.
‘There are some significant benefits to being part of EFTA with respect to governing trade ties with Norway, Iceland and Switzerland, who make up six per cent of the UK’s trade.
‘For businesses currently trading with and operating in the EU market, [re]joining the European Economic Area (EEA) would cause the least potential for disruption…however for other industries like financial services, the issue of regulatory control is equally if not more important and so this option longer term is undesirable from that point of view’.
‘It is misguided to suggest that being in a customs union with the EU is an inherently mutually exclusive choice between control over trade policy and frictionless free trade with the EU – although our ability to negotiate full trade agreements would be constrained in any kind of permanent customs union arrangement’
‘There are 2 different types of customs union models relating to the EU – the EU’s full one and a customs union agreement with the EU…the latter is partial in scope and does not remove the need for extra paperwork, while the former is unlikely to be a permanent option for a non-EU country as it marks out the EU’s external borders’
‘Issues of customs control and cooperation are absolutely not dependent on being in a customs union with the EU, although it would be on paper be one of the simpler ways of dealing with the Irish border and eliminate the need for rules of origin to be sweepingly introduced for UK-EU trade’
‘A free trade agreement is more desirable to fit some of the more bespoke needs of both parties, but one of the biggest trade-offs with this kind of bespoke model is of course time needed to conclude the agreement in complete detail’
‘A UK-EU free trade agreement should act as a ‘living agreement’, allowing it to be updated on a rolling basis to address trade issues that may arise going forward’
The report also offers essential advice for SMEs on how to prepare for Brexit, and reveals what IoD members believe are the issues of greatest importance when it comes to the UK leaving the EU.
Navigating Brexit full report
Navigating Brexit for business
To help you navigate your way through the complex Brexit minefield, we have created a hub where you can find the latest information, guidance and advice to support and inform you and ensure you are fully up to date.
Visit our Navigating Brexit hub
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