If the UK left the EU, the UK would need to continue trading with Europe.
So, if the UK were to leave, it would be faced with a choice either:
- not to follow the rules and no longer have access to the single market; or
- to copy EU rules without any formal input into how those rules are made.
At the time of writing, the pro-Brexit campaign has not put forward a united proposal for what form departure from the EU would take – but a range of alternatives have been suggested.
None of the most commonly proposed alternatives would be straightforward to implement; and none present the utopia of “benefits without burdens”. There are two broad models:
- negotiate a trade agreement with the EU; or
- rely on WTO rules.
This section explains why the alternatives promoted by the leave campaign are not in the UK’s interests.
Summary: benefits of the most common exit models vs the status quo
|BENEFIT||EU membership – the status quo||Norwegian (EEA) option||Swiss option||Turkish option||FTA option||WTO option|
|Full access to single market||✓||?||✗||✗||✗||✗|
|Some single market access||✓||✓||✓||✓||?||✗|
|Single market access for financial services||✓||?||✗||✗||?||✗|
|Free movement of people||✓||✓||✓||✗||?||✗|
|Benefit of EU trade agreements with rest of world||✓||✗||✗||?||✗||✗|
|No EU budget contributions||✗||✗||✗||✓||✓||✓|
|Free to trade with EU without complying with EU legislation||✗||✗||✗||✗||✗||✗|
The following pages look at these options in more detail:
- As well as the most commonly proposed alternatives described in this section, there are a number of other more speculative options which this report does not address in detail, in particular as they have not been broadly supported by advocates of a UK exit from the EU. For example, these include the “Commonwealth option” (exiting the EU and pursuing increased free trade in the Commonwealth and wider Anglosphere) and the “NAFTA option” (joining the North American Free Trade Area (NAFTA) of Canada, Mexico and the USA, forming a new “North Atlantic” free trade area). These options envisage the UK concluding its own bilateral trade agreements or free trade / customs union with the Commonwealth, NAFTA or other third countries. However, the success of such options is highly speculative: it is common sense (particularly when we think about perishable food and agricultural products) that free trade with your neighbours should be more advantageous than free trade with a more geographically disparate group of countries, and there is no certainty that NAFTA members, for example, would welcome the UK into the agreement. The US has stated that it does not want an FTA with the UK outside the EU. ↑