UK: Great Repeal Bill – Don't Know What I Want, But I Know How To Get It

Last Updated: 4 September 2017
Article by Aaron Nelson and David Mundy

Events this week have raised again the question of what sort of Brexit the Government is seeking.

We discussed in the last post that Chancellor Philip Hammond and SSExEU David Davis seem to be at odds, with the Chancellor increasingly pushing the economic argument for a 'softer' Brexit (even if that diminishes 'sovereignty'), while the SSExEU insists that (as set out in the White Paper) the UK will definitely be leaving both the single market and the customs union by March 2019.

This week has brought reports that DExEU is increasingly accepting that there will need to be trade-offs between market access and political control when the UK leaves the EU (ie the UK cannot 'have its cake and eat it').

Of course, Labour's position is little clearer, with Corbyn sacking three shadow ministers on Thursday for supporting a backbench Queen's Speech amendment which backed staying the Single Market.

In that context, let's have a look at the UK's options.

Staying in the single market

The single market is perhaps the most ambitious type of trade co-operation. That's because as well as eliminating tariffs, quotas or taxes on trade, it also includes the free movement of goods, services, capital and people. For goods, the single market strives to remove tariffs and also so-called 'non-tariff barriers' like different rules on packaging, safety and standards (hence all those EU regulations). A single market for services is more difficult, because the 'non-tariff barriers' are things like necessary qualifications and applicable regulations. It remains a work in progress.

In order to stay in the single market, the UK would have to allow the free movement of goods, services, capital and people, which means immigration is difficult (if not impossible) to control. Membership of the single market also normally involves making annual payments towards the EU's budget and accepting the jurisdiction of the European Court of Justice.

In the current political climate, we can probably rule this option out.

EU customs union

The UK could aim for a relationship like Turkey has, which is part of the EU customs union, but is not in the single market (which means it is not obliged to follow EU single market rules on allowing freedom of movement, and so has 'control of immigration').

In a customs union, the countries agree to apply the same tariffs to goods from outside the union. Once goods have cleared customs in one country, they can be shipped to others within the customs union without further tariffs being imposed. Going for this option would solve the Irish border question – it would remain relatively open and easy for goods to cross.

Charles Grant, director of the Centre for European Reform said this week:

'Though retaining a customs union with the EU would madden the Tory right, there is a strong macro-economic case for doing so. According to the Treasury's unpublished analysis, the economic benefits of future [free trade agreements] would be significantly less than the economic cost of leaving the customs union.'

On the other hand, some argue that staying in the EU customs union would be of little benefit to the UK.

  • First, because services are a huge part of the British economy (about 78%) and are not generally covered by the EU customs union (nor would agriculture or fishing, since the UK would not be in the CAP or CFP).
  • Second, the UK would have to comply with 'rules of origin' (ie demonstrate that UK goods originated in this country and were not just imported from, e.g. China or India, and then exported tariff-free into the EU). That could complicate the UK's trade with those companies (particularly in the motor industry) that import components from around the world to put into finished products made in the UK.
  • Third, the UK couldn't negotiate free trade deals with other countries, as the EU would do that (as it does now).
  • Fourth, it would probably mean paying money to the EU and accepting ECJ judgements when they relate to trade.

A new customs union?

Given these disadvantages, one idea being floated is that the UK would leave the EU customs union, but create a new customs union with the EU customs union in respect of goods.

This would allow physical products to trade freely across borders without export duties or delay so long as the EU27 and UK shared a common external tariff (or perhaps more accurately, so long as the UK continued to mirror the EU's external tariff). Crucially, however, that deal would not apply to services, and so would not prevent the UK seeking deals with countries outside the EU in the services sector.

Any such deal would have a number of hurdles to overcome: the EU27 may consider it 'cherry picking' and may also require the UK to 'mirror' EU regulations on product standards and to remain subject to the jurisdiction of the ECJ (which hard Brexiteers would resist). The EU27 have also stated that, in principle, the UK cannot have a better deal outside single market than within it.

Free trade area

The White Paper position is to leave both the single market and the EU customs union, and to seek to negotiate a free trade deal with the EU, ie a deal under which there are no tariffs or taxes or quotas on (particular) goods and/or services from one country entering another. In the services sector (e.g. banking and education), the free trade deal would involve mutual recognition of different rules, standards and qualifications.

The UK could join EFTA, the European Free Trade Association, which currently has Norway, Iceland, Switzerland and Liechtenstein as members (but note that all but Switzerland are also part of the single market). Switzerland has had to negotiate individual deals with the EU covering particular sectors – this has been a long and arduous process.

The EU also has free trade arrangements with many other countries around the world; so it is not against negotiating one with the UK in principle, but compared with staying in the single market or the customs union, or even a new customs union, this would be the 'hardest' form of Brexit. It would also almost certainly mean border controls (including between Ireland and Northern Ireland).

No more fudge

What the Government cannot do is continue to obfuscate the choices to be made with meaningless phrases like 'Brexit means Brexit'. It needs to agree in its own ranks what option to take, in order that real progress can be made in the EU negotiations over the summer. Sustaining the fudge is walking into the negotiations without knowing what it wants.

'Don't know what I want, but I know how to get it' (The Sex Pistols, Anarchy in the UK)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Travers Smith LLP
Brodies LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Travers Smith LLP
Brodies LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions