The Institute of Directors has today called on the Cabinet to
come to a collective decision on how to approach a transitional
agreement as soon as possible. The Chancellor has in recent weeks
spoken of the need for interim arrangements between ‘exit day’ in
March 2019 and the point at which a new trading arrangement with
the EU is completely finalised. There are, however, different
options for transition and for businesses to be able to plan
ahead, they need to know what route the Government will pursue,
the IoD said.
In an new report, Bridging the Brexit Gap:
Options for transition, the business group puts
forward a range of options for a business-friendly transition to
consider, outlining practical details and potential trade-offs
between them. These include:
-
Prioritising an agreement to extend the Article 50
deadline – on paper this would be the simplest
solution for all, giving the UK government more time to
negotiate a new trading relationship with the EU as part of its
withdrawal agreement, and would be the easiest to square with
the World Trade Organisation. It would be a very politically
challenging option, however, both for the EU and parts of the
House of Commons
-
Membership of the European Economic
Area – this is an ‘off-the-shelf’ model, which
would give the UK a degree of autonomy in implementing EU
rules. It is not straightforward, however, and tight time
constraints could complicate negotiations
-
Agreement to prolong the application of EU law (the
‘acquis’) – This has been cited as an option by
the EU Council in its original negotiating guidelines, and
could work more easily with time limitations. It is more
comprehensive than other options, but likely to leave the UK
with less control or input than the EEA option
-
Transitional customs agreement – To
accompany the above options and replicate the benefits of being
in the EU Customs Union, which the UK likely is have to leave
upon exit. It includes maintaining Common External Tariff
alignment and continuing to transpose EU customs & VAT
legislation
Allie Renison, Head of EU and Trade Policy at the Institute of
Directors, said:
“Businesses will be pleased that Ministers increasingly
acknowledge the importance of a transition period in the Brexit
process to minimise economic disruption. There is now a window of
opportunity for the Government to flesh this out as a policy
objective in order to reassure companies that a smooth and
orderly Brexit is on the cards.
"Prioritising interim arrangements and thereby mitigating the
risks of EU exit means the eventual opportunities aren’t
diminished by short-term chaotic cliff edges. The IoD has put
forward this range of options for transition in the hopes that it
sparks a proper debate on the practicalities of how best to
Brexit. We look forward to engaging with both the Government and
the EU on these proposals.”
The report, Bridging the Brexit Gap is
attached.
