Bespoke or off-the-shelf: UK options for a trade deal
EU negotiators are holding fast to the principle that the UK cannot get a trade deal that is better than membership, that it cannot cherry-pick its own mix of rights and responsibilities. It can have full market access like Norway, provided it pays the price and accepts the Four Freedoms, or it can have a standard free trade agreement like Canada which does not cover much of the service sector (around 80% of the UK economy)
The UK has rejected this “stark and binary choice”, calling for a bespoke free trade agreement. A study by the Institute for Government – “Options for the UK’s relationship with the EU” – notes that there are precedents for deals in the “middle ground” between Norway and Canada. However, access has always carried strict obligations. It sees three broad strands in the access/obligations mix.
An EU–UK Economic Area (‘Bespoke Norway’)
The UK broadly accepts Single Market rules and parallel institutions, but negotiates a new arrangement on freedom of movement and greater input on devising regulation (though it would not have a final say).
- An EU–UK Deep and Comprehensive Free Trade Area (‘Reverse Ukraine’)
This would allow participation in the Single Market in sectors which remain aligned and subject to oversight. Non-harmonised sectors would face barriers.
- An EU–UK Comprehensive Free Trade Agreement (‘Canada plus’)
This would be modelled on the EU-Canada Comprehensive Economic and Trade Agreement (CETA), but with the aim of agreeing better access for services and provisions for enhanced regulatory co-operation, to try to minimise trade barriers where possible.
The political problem is that the British side has never publicly accepted the very concept of a trade-off between access and obligations, never said what it actually wants. Indeed, we have now learned that until last week, the UK Cabinet had never even discussed it. To the EU side, ‘bespoke’ sounds like cake-and-eat-it all over again. Sometimes an off-the-shelf outfit appropriately nipped and tucked but basically unaltered really is the best deal.