The recent UK government White Paper on future arrangements with the EU has prompted heated political debate, primarily within the ranks of the governing Conservative party, and also evoked scrutiny by the EU. A webinar, hosted today by Frontier and organised by the Trade Knowledge Exchange, examined the implications. Lord Gus O’Donnell moderated the webinar, which featured Professor L. Alan Winters (Sussex University) and Amar Breckenridge (Frontier) as experts.
Some of the key points from the webinar are that:
- While the immediate focus of the White Paper is on trade with the EU, the proposals also help define the UK’s trade policy stance with the rest of the world.
- The White paper is a negotiating document that seeks to bridge differences both with the EU, and within the UK government. It proposes a grand political bargain. Deep integration with the EU’s single market for goods is sought to meet economic concerns about disruption to supply chains and political concerns about the Irish border issue. But an exit from the single market in services is proposed, in exchange for the UK exiting single market rules on the movement of people, which would allow the UK to set its migration policy independently of the EU.
- The proposed common rule book approach and customs facilitation agreement are experimental. The proposals are designed to minimise or avoid administrative formalities on UK-EU trade, but would still require significant investment in resources on the part of the UK and the EU.
- The UK’s position on services may reflect its relative strength in that sector, and confidence that it can agree free trade agreements outside the EU. But negotiating deep agreements on services may prove challenging, as they involve agreeing on approaches to regulations. And partners may be less willing to enter into negotiations with the UK if their prospects for deals on goods are limited.
- While implementing the proposals would leave the UK (and the EU) better off than a no-deal outcome, there are still risks that the UK would be left substantially worse off than under current arrangements.
A report on the webinar and a link to the video can be found here.
Frontier Economics regularly advises on trade policy in the UK, Europe and globally. Frontier Economics and Sussex University, along with four other partners, established the Trade Knowledge Exchange in 2018 as a hub for analysis and discussion of trade and related questions, with a particular focus on the UK.
For more information please contact [email protected], or call +44 (0)20 7031 7000