European Union: Brexit: The Way Forward For Trade

Last Updated: 25 July 2016
Article by John Whittaker

Most Read Contributor in UK, October 2017

As the country, and indeed the World, reacts to the UK's vote to leave the EU, it is important to take stock and contemplate our future as an international trading nation. Since the vote on 23 June, we have seen various positions adopted by our trading partners around the EU. From the hard line stance of the European Commission to the more pragmatic approach taken by German Chancellor Angela Merkel. In the absence of any clear plan, compounded by a political vacuum not to mention negotiating positions, it is impossible to predict what will follow. We look at how Brexit could impact trade over the coming years.

Our future with the EU

Whatever route is taken, there will be major implications for trade.

The EU is the most important trading partner of the United Kingdom and the United Kingdom is the most significant export market for some, but not all, of the EU nations. This is a good starting point. However, whilst we may have full "control" over future lawmaking, we must remember that if we want to trade with the EUwe have to be compatible with EU law and that will mean, inevitably, we lose some control.

Whilst the EU has stated that the UK cannot gain access to the single market without free movement, it must not be forgotten that following Brexit the UK will benefit (in theory) from new-found flexibility in our ability to negotiate trade agreements. The outcome of these, likely difficult, negotiations is paramount to the UK for its trade and services.

Our options with the EU

"The Free Trade Agreement Option" - the UK could look to establish one over-arching deal rather than a set of multiple bilateral agreements. In theory this is appealing, but EU officials have been keen to stress that negotiations would not be rapid or straightforward – there is no appetite in Brussels to make leaving an easy option and so encourage others to follow the UK out the door.

"The Swiss Option"  - the UK would seek to negotiate a set of bilateral options that would regulate access to the market on a sector by sector basis. Whilst this would represent the ultimate in control over our trading future, negotiating such agreements in the atmosphere of animosity which we now find ourselves in would be no easy task.

"The Norwegian Option" - the UK would have to re-adopt or confirm EU regulations and standards. We would become part of the European Economic Area, which currently numbers just Norway, Iceland and Lichtenstein.

Our future with the rest of the World

Further afield we have no recent history in negotiating trade agreements on a bilateral basis, though the EU has preferential agreements with many nations. Although the UK will be able to negotiate their own trade agreements, there are difficulties which lie ahead. If we use the EU as a base not only must we agree terms with them, but also have the administrative infrastructure to negotiate and implement agreements with other countries – a process which is likely to take many years. Even then, the UK may be constrained by what it agrees with one country in that it may prove an obstacle for an agreement with another.

As a member of the World Trade Organisation in its own right, the UK would still benefit from its most favoured nation (MFN) position in GATT and use this as the basis of new trade deals. But MFN would not give the UK carte blanche to enter into any bilateral agreements without fulfilling WTO criteria; bilateral agreements are prima facie treated as exceptions to the MFN principle. Consequently, MFN status is partly a burden as well as a benefit.

There may also be political constraints. For example, China is an attractive trade partner, but a crucial element of their status within the WTO is the right for other member nations to treat them as a non-market economy and so "ignore Chinese prices and costs in anti-dumping cases and instead calculate dumping margins using external benchmarks". This effectively allows the US and EU to place much higher duties on imports from China in anti-dumping cases than if China was treated as a market economy. The issue of China's status as a non-market economy remains a live issue both at EU and US level, as well as with other emerging markets such as India.

It is highly likely that as part of any trade negotiation, China would require the UK to grant it market economy status – a line in the sand whichmay displease the EU and US, if crossed. The UK may find it hard to satisfy China, the US and EU on this issue following Brexit.

Which route is best for the UK and best for traders?

Whilst it is too early to know how our relationship with the EU and the rest of the World will look in the coming years, there are a few certainties.

With the indication that we will not invoke Article 50 (triggering the two year countdown to Brexit) until David Cameron leaves his post, this volatility will be here for some time. It seems unlikely that Article 50 will be invoked without a plan and at the very least a clear expectation as to what is achievable. That too may take time and even when Article 50 is invoked, we can expect a protracted period of negotiation and uncertainty until an agreement with the EU is reached. Such negotiations will not be quick or straight forward – look at the WTO DOHA talks for example, which were abandoned after 14 years to be replaced by a series of separate, more manageable one on one discussions.

Brexit: The Way Forward For Trade

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.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


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.