What would Brexit mean for business? We look at the alternative models to EU membership

Should we follow Norway’s example? What about Switzerland?

If the British people vote to leave the European Union on 23 June, then the UK will have a lot of work to do.

For those campaigning to keep our membership, the plan is simple. Vote to stay, and nothing will change.

But for those campaigning to exit the EU, there is no consensus on what the post-breakup model will look like.

Currently the UK depends on its membership of the EU for access to the single market. The key principles of the single market are the free circulation of goods, capital, people, and services within the EU.

This means we avoid negotiating and paying tariffs for exports as everything in the EU is free.

Without the EU the UK will have to renegotiate this very sweet deal.

The Leave campaign is currently arguing that Britain will continue to trade as freely as we do now, following renegotiations with the remaining member states of the EU.

But that is not very easy to believe.

The UK will not be able to dictate the terms of its departure from the union, and the other member states are very reluctant for Britain to leave. They may not make things easy for us.

Let’s look at how other countries outside the EU have managed:

Norway

This is seen as the most likely model for the UK, should it pack its bags and divorce the EU.

It took Norway more than 20 years to negotiate their current trade deal. Despite the lengthy haggling process, Norway now pays into the EU budget, must accept the free movement of EU citizens through its borders, accepts around 75% of EU laws made in Brussels, and in addition, has to pay tariffs on its exports of food and fish. Norwegian courts accept laws on the basis of its status as a European Economic Area country.

The worst part? As it is not a member of the EU, it has no say on any of these rules.

Switzerland

Like Norway, Switzerland must also pay into the EU and accept the free movement of people as per EU rules. In return, the EU allows Switzerland access to the single market. However, Switzerland recently attempted to cap levels of immigration, and the EU responded angrily and threatened to cut off access from the single market. This would have been an economic disaster for Switzerland.

Switzerland’s courts are not currently bound by EU law, though it is under growing pressure to sign up to a similar system to that used in Norway, giving the EU judicial supremacy.

Canada

In an attempt to improve trading links with Canada, the EU and Canada remains in the process of building a new political-economic framework.

This process has already taken seven years, and so far only provides Canada with incomplete access to the single market. Financial services remain outside the agreement, and the draft trade deal remains hampered by various political wranglings.

World Trade Organisation (The New Zealand option)

A fourth option on the table is for the UK to renegotiate its trade agreement as New Zealand does, through the World Trade Organisation.

This would largely protect British firms from paying exorbitant export duties, however, there would be a few glaring omissions, which would have a severe impact on many British firms, and in one case, an entire industry.

According to the government’s latest report, this would include new industry-crippling 20% tariffs on Scotch whisky - the UK’s largest food and drink export - and 10% tariffs on cars and car parts.

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