A YouGov poll for the accountancy firm RSM has found that midsized British businesses want a Brexit that leaves the UK with a similar relationship to the EU as either Norway or Canada. The FT reports that each model scored 22% with 17% opting for a relationship like that had by Switzerland.
The RSM Middle Market Tracker polled 315 companies with an annual turnover between £30m and £300m.
EEA- or CETA+?
None of the models which companies in the RSM poll voted on are reflective of the UK government’s ‘bespoke’ desire for a ‘frictionless’ trading relationship with the EU that includes financial services while reclaiming control of the movement of labour.
The European think tank Bruegel suggested that the outcome of the second phase is likely to be a modification of either the Canada or Norway model -something along the lines of a ‘CETA plus’ or ‘EEA minus’ deal.
‘CETA plus’ would represent an FTA like that which the EU has with Canada but extended to also include industries key to the British economy like financial services. The ‘EEA minus’ model suggests that the UK remains within the single market but without the UK accepting freedom of movement.
The Norway model, however, accepts freedom of movement, with Norway also accepting regulations and paying a contribution to be part of the single market. The Switzerland model also accepts freedom of movement and is shaped by bilateral deals with the EU that gives it market access to the bloc. Like CETA as it currently stands, the Switzerland model does not include a ‘passport’ for selling financial services into the bloc.
19% of respondents said that it would be preferable for the UK to revert to WTO rules compared to adopting the other ‘off the shelf’ models.
Webinar on Brexit next week
The nature of the UK’s future trading relationship with the EU - and a transition period towards it - is the topic for Phase 2 in the negotiations for the UK’s leaving the trade bloc.
At the Institute we are continuing to recommend that businesses have a strategy that mitigates against the risks associated with all of the models mooted. Part of this recommendation is a call for companies to up-skill in areas of customs compliance and export documentation in case new tariffs and border controls are introduced.
A great starting point for preparing for the potential impact of Brexit is the Open to Export webinar next week on ‘What exporters need to know about Brexit in 2018’. You can register for this introductory session here.
We also recommend signing up to our regular ‘Post-Brexit Planning Workshops’ which provide exporters and importers with the knowledge to prepare for different Brexit outcomes, in the medium and longer term, and offers a checklist of practical steps to anticipate changes and take advantage of opportunities.
Sources
The Financial Times, 14/01/18 - 'Midsized companies favour break from single market'
Bruegel, 13/12/17 - Brexit, phase two (and beyond): The future of the EU-UK relationship