With the UK now examining its trade options in a soon-to-be post-Brexit environment, all eyes are towards Mrs May and her team of negotiators. It’s clear that if Britain’s manufacturing industry is to survive we need to develop a plan for trade with the entire world, and that means Europe too.
In the first part of our guide, we took a look at three of the most commonly touted models that Brexiteers have suggested for the UK going forward. That included the Swiss, Turkish and Norwegian models, all of which present advantages and disadvantages for the UK. So, can any of our other three options present a bright future for the UK’s trade? Let’s find out.
- The Canadian Model
Canada don’t currently have a free trade deal with the EU, although they hope to have one soon – after all, they have been working on one for over 7 years. The Comprehensive Economic and Trade Agreement (Ceta) will give Canada access to the free market, eliminating most tariffs on goods.
However, not everything is covered by Ceta, as foodstuffs and services are left out. Canadian companies hoping to export to the EU will also have to prove that their goods are made entirely in Canada to ensure the European market isn’t flooded with illegal goods.
Most importantly for the UK, banking wouldn’t get the right to “passporting” their services to the EU like they do – a right they value extremely highly. It would also mean that a manufacturing company like us would still have to comply with the full range of EU product standards and requirements for our stainless steel fittings. They will do that, however, without having any say in how those regulations are formed.
- The Singapore/Hong Kong Model.
Many of those who believe in Brexit have said that the UK should adopt a unilateral free trade policy, which would mean dropping all tariffs and relying on the World Trade Organisation’s framework.
It’s an approach that Singapore and Hong Kong employ. In their own words, the Hong Kong government says it “does not charge tariff on importation or exportation of goods” and that “Import and export licensing is kept to a minimum”. It would also mean the UK wouldn’t have to accept free movement, and could trade with the globe.
However, there is a large downside. Because the UK wouldn’t be able to apply any tariffs to imported goods, UK sectors like agriculture and manufacturing would take a huge hit. In these circumstances, it might well be cheaper to purchase food, steel or products from abroad than it would be to make them ourselves – thus potentially crushing several key sectors.
- A Custom Model?
Many in the Brexit camp believe that the UK could yet strike a custom deal with the European Union. Such a deal, in ideal circumstances, would have us trading freely with the European Union, forging our own deals with the rest of the world and would control fully our own borders.
Such a dream, however, seems immensely unlikely. The EU is made up of many nations, lots of whom will have a vested interest in ensuring that the UK do not receive everything they want. From their respective the UK’s trade is important, but also is proving that simply being important doesn’t mean you get eat dinner without paying for it.
The job that Mrs. May and her team of negotiators now have is to forge a path for the UK outside of the European Union. As yet, we have no idea what that means.