European Union: The Future Of U.K.-EU Trade: The Bilateral Trade Agreement Model

In the aftermath of Brexit, the United Kingdom is faced with the challenge of negotiating a relationship with the European Union that balances Single Market access with national control over the movement of goods and workers. This article is the last of a four-part series examining the three models for a future U.K.-EU relationship.

Previously we have provided an overview of the three models as well as close-ups on the “Norway Model” and the “Swiss Model.” Here, in our final installment, we analyze the “Bilateral Trade Agreement Model.” We identify the main features, benefits and drawbacks.

What is the Bilateral Trade Agreement Model?

Under the Bilateral Trade Agreement Model, the United Kingdom would negotiate a comprehensive free trade agreement (FTA) with the European Union, as opposed to a series of bilateral treaties (e.g. the Swiss Model). This model may offer some flexibilities not afforded in other models. Recent EU FTAs with South Korea and Canada provide two prominent examples of what could be possible for the United Kingdom.

The EU-South Korea FTA took effect in July 2011, and eliminated duties for industrial and agricultural goods in a progressive approach. The agreement also addresses non-tariff barriers to trade, specifically in the automotive, pharmaceutical, medical device and electronics sectors. South Korea agreed to liberalize access for some services sectors, namely some professional services, telecommunications, environmental, transport and financial services.

While the EU-Canada Comprehensive Economic Trade Agreement (CETA) is not yet in force, it could be the closest approximation to the final outcome of an EU-U.K. agreement. The proposed text of the agreement will eliminate nearly all tariffs; open bids for government contracts to cross-border entities; liberalize financial, investment and some professional services sectors; harmonize some professional qualifications; and strengthen cooperation between European and Canadian standard-setting bodies. Canada has committed to upholding EU standards for goods and services traded in the EU markets.

What are the potential benefits for the United Kingdom?

An U.K.-EU FTA would likely at least provide for tariff-free trade in goods. Recent EU FTAs have provided for liberalization in some, but not all, services sectors—a concession the United Kingdom would want to push heavily for, given the importance of its services industries. Under an FTA, the United Kingdom would be bound by EU standards for any goods or services supplied to the EU, but it would not otherwise be subject to EU policies or the four fundamental freedoms—free movement of goods, services, workers and capital.

The United Kingdom would regain control over its immigration policies. New migrants, including those from the European Union, would need to qualify under United Kingdom Immigration Rules. This would likely stem or cease the net in-flow of unskilled workers. The United Kingdom could concurrently relax immigration requirements for skilled workers to attract skilled migrants.

The United Kingdom would also gain greater control over regulatory policies, which could result in some cost savings relative to current EU regulations. Policy areas with the greatest increase in self-determination would include social, employment, health and safety, environment and climate change.

The United Kingdom would not be obligated to contribute to the EU budget, an annual cost savings of approximately £96 per capita, based on last year’s net United Kingdom contribution.1

What are the potential drawbacks for the United Kingdom?

As noted above, the United Kingdom would still be required to implement EU standards on goods or services traded in the EU markets. As with the other models, the United Kingdom would have no voice in the creation of those standards without representation in Brussels. Increased regulatory independence in the United Kingdom could also result in divergence between U.K. and EU regulatory policies over time. This could result in increased non-tariff barriers to trade.

FTA negotiations with the EU could be lengthy. CETA is one of the most comprehensive modern trade agreements, which is reflected by the length of negotiations. CETA talks began in 2007 and concluded in late 2014, but the date of signing was just proposed by the European Commission earlier this month—a total duration of almost eight years. The EU-Korea FTA talks were significantly shorter, beginning in May 2007, and concluding just three years later in October 2010.

Under an independent FTA with the European Union, it is unclear the extent to which the United Kingdom could remain party to EU trade agreements with other countries. The United Kingdom would likely need to assess its status and position with respect to each agreement. If these agreements were not applicable to a future United Kingdom, trade with the implicated countries would revert to the less favorable World Trade Organization (WTO) terms.

Overall Assessment

Negotiation of an FTA may provide additional flexibilities for U.K.-EU trade relations. However, it is also the approach most vulnerable to the domestic political environment. It remains unclear whether the United Kingdom would be willing to reduce tariffs to zero, particularly in sectors, such as agriculture, that have powerful lobbies. With respect to the European Union, any U.K. terms would need to pass muster with all 27 remaining member states, which would be far from a frictionless process.

An agreement could be comprehensive or limited to certain sectors. As with the Swiss Model, the more substantial the agreement, the more the United Kingdom would need to be abide by EU regulations. The strength of the United Kingdom’s bargaining position with respect to the inclusion of services, specifically financial services, in an FTA is unclear. At best, the United Kingdom could achieve the same level of access its firms currently enjoy. At worst, an FTA would leave out services entirely, which would undermine the attractiveness of the United Kingdom as a financial and business center.


*This blog post was originally on Beyond Brexit. 

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

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

In association with
Related Video
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.