What Would Brexit Mean for UK Business and Trade?
The EU referendum debate is cranking up its intensity with President Obama recently announcing his firm support for Britain to stay in the EU, but despite the US president’s show of conviction, many business owners remain unsure as to how their businesses and business practices would be affected by a Brexit vote.
Here we take a brief look at some of the existing models for involvement with the European Economic Area (EEA) among countries from outside the EU.
Norway is not a part of the EU, but is a member of the EEA with broad access to its single market. It accepts many EU regulations without being at the table to discuss them, while still making contributions to the EU budget. This lack of influence in European governance is balanced out by Norway’s freedom to make independent trade agreements and autonomy on, among other home affairs, agriculture and fisheries, environmental law and worker’s rights.
Like Norway, Switzerland makes contributions to the EU budget. Unlike Norway, however, Switzerland negotiates its treaties with the EU single market sector by sector and remains mostly independent of its regulations.
Like Andorra, Monaco and San Marino, Turkey is not part of the EU but a member of the EU Customs Union (EUCU). Turkey’s exports to the EU are tariff free, giving it the opportunity to benefit from the single market in some sectors – although notably NOT financial services or agriculture – while its external tariff is set by the EU. This means that its trade with countries that have an agreement with the EU can be lopsided and disadvantageous.
According to its recent Comprehensive Economic and Trade Agreement with the EU, Canada will make no contributions to the EU budget, but will have trade conditions in place that see minimal barriers and tariffs to most sectors, save financial services.
Predicting what post-Brexit international commerce would look like is an impossible task, with years of negotiation required to map out and define what would be a new landscape of deals, treaties, tariffs and trade for the UK. Nevertheless, an exit from the EU would certainly carry big implications for many UK businesses, and by looking at existing models we can gain some idea of the possible outcomes.