By Professor Pervez Ghauri, University of Birmingham, UK (firstname.lastname@example.org) and
Professor Ursula Ott, Nottingham Trent University, UK (Ursula.email@example.com)
After more than forty years of UK membership in the EU, the UK and the EU have been negotiating the exit of the UK from the EU for two years. We analyse possible outcomes of these negotiations. There are examples of countries that are not members but have a close relationship with the EU. These examples provide possible outcome of Brexit negotiations.
The Brexit-Negotiations could have been conducted amicably with offers and counter offers. However, while the EU have been trying to be rational, the UK has been negotiating with a somewhat emotional approach. In most negotiations, parties do not get what they wish, they must give and take to come closer to reach a compromise. In a so called White Paper, UK announced twelve objectives that it wanted to achieve. We analyse some examples that can help the UK achieve these objectives:
Norway Model. This model allows an access to the single market by paying a membership fee and allowing free movement of people which was clearly rejected by British referendum and the White Paper. Therefore, this model needs to be negotiated, which might be difficult.
Canada Model. This agreement was achieved after several years of negotiations and includes free trade in many products/services and no free movement of people. This needs a long period of negotiations and would mean uncertain and difficult time for UK residents.
Ukraine plus agreement. This model is rarely discussed by British politicians or by the media. However, it seems to be the closest to objectives listed in the White paper. In addition to free trade in most products/services and no free movement of people, this agreement includes security collaborations that is desired both by UK and EU.
No deal = WTO rules. In case no deal is agreed by 29th March 2019, all present arrangements will cease to exist, and several agreements will have to be negotiated following WTO rules for trade. This might lead to similar arrangement as US-EU trade relationship and may take several years to negotiate.
UK model on the table: Single market access (through tariffs, quota, agreements and payments) and special agreements to be negotiated for financial services, security issues, Northern Ireland border and no free movement of people. The negotiations will proceed following offers and counter-offers depending upon the bargaining power of parties.
While remaining in EU is the best option for the UK, at present this seems not to be achievable unless there is a second referendum and majority of people vote to remain. Considering the present deadlock in the UK parliament, a second referendum is a real possibility. Keeping the second referendum aside, our analysis reveals that the Ukraine plus model is the most suitable for the UK. The next best option is the Canada model. The Norway model is not a very viable option as the UK will have to pay a membership fee and it will have to accept some level of free movement of people.
To read the full academic article click here
Ott, U. F. and P. N. Ghauri (2019). "Brexit negotiations: From negotiation space to agreement zones." Journal of International Business Studies 50(1): 137-149.