Free and frictionless

The Government has stated that it is seeking a “deep and comprehensive” free trade agreement with the EU which will allow for “the freest and most frictionless trade possible in goods between the UK and the EU”, whilst allowing the UK to negotiate its own trade agreements with third countries. The EU’s position is that frictionless trade with a country outside the Single Market and the customs union is not possible - the European Parliament’s coordinator on Brexit, Guy Verhofstadt, went as far as to say that it was “a fantasy”

The Institute for Government - a UK-based independent think tank - points out that “there is no pre-existing model of relationship with the EU which would completely mitigate disruption and the need for border checks”. The agreements which the EU has with most of the its major trading partners, including Canada, Japan and the USA, seek to facilitate customs arrangements but they do not remove “friction”.

Beyond all that, any new arrangements put in place at UK ports will need to be replicated at the Channel ports in France and Belgium, and the UK would have to pay for the changes.

One point that may allow us to negotiate better terms in some areas is that without our budgetary contribution the EU will be a bit short. With that in mind some EU members would be happy for the EU to sell us access to certain sectors of the single market, such as financial services, as long as we adhered to EU regulations. Not all members like that idea, for example Germany and France would like to have our share of the EU financial services industry - France is cutting taxes explicitly to lure banks from the UK to Paris with 10,000 jobs as the goal: "We want to make sure that Paris can profit from Brexit." This isn't about punishing the UK, this is an attempt to attract the banks to Paris rather than letting them go to Frankfurt, Dublin or Amsterdam. It seems unlikely that those countries will vote to allow financial services easy access to the EU market. Why would they?

So the UK is seeking an agreement with the EU which is different from anything previously achieved, one which the EU itself does not want, and which will be worse for us than the current deal while costing us more.

Thanks Boris.