A Better Deal for Brexit

While the usual suspects fight the same, tired fight over Brexit in Parliament, a group of MPs has attempted to change the narrative by proposing a fresh approach.

The "A Better Deal and a Better Future" proposal builds on established models to offer a realistic and achievable solution while reaching across the house by offering a compromise: it respects the referendum and is not afraid of the "no deal" (i.e. WTO or World Trade Deal) scenario but crucially acknowledges that a deal is preferable and details a framework based on the offer of a Free Trade Agreement made by European Council President Donald Tusk in March 2018 to deliver one.

The proposal is authored by senior Conservative MPs including Steve Baker, Sir Bernard Jenkin, Sir William Cash MP, Lord Lilley and Marcus Fysh MP as well as noted trade negotiator Shanker Singham. It is also supported by Jacob Rees-Mogg, David Davis, Boris Johnson, Dominic Raab, Priti Patel, Esther McVey and others.

The Better Deal model sets out two strands which the model proposes are required to deliver arrangements capable of securing the support of Parliament and the nation:

  1. The UK should table legal text to revise the agreements already reached to deliver a relationship with the EU (for the whole UK) in line with Tusks's proposal; while in parallel
  2. The Government would continue to prepare the UK to leave the EU on World Trade Organisation (WTO) terms on 29 March 2019 as a "backstop" in the event such agreements cannot be reached in the available time.

While the primary objective is to achieve a mutually beneficial deal with the EU, the WTO scenario would provide a temporary backstop should negotiations not be completed before 29th March 2019. Under WTO terms the UK would be able to continue to trade with the EU without having to impose tariffs or quotas in the interim (the ultimate legal authority to grant such preferences is Article 24 of GATT) and without the need to impose a hard boarder in Ireland. While the WTO option is not optimal, the friction it would cause is less than some reports might suggest.

This would mean that the UK could start to sign trade deals with the US, India, China, Australia, New Zealand and others without delay as well as apply for membership of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).

The plan also sets out the steps required to achieve this. In the preferred scenario, the deal is agreed and ratified by 29th March:

However, should the WTO backstop be required, the sequence is as follows:

This would also be a better deal for financial services, which are conspicuously absent from the Withdrawal Agreement despite their importance to the UK economy. We have already warned of the dangers to the City inherent in the current Withdrawal Agreement. The Better Deal approach is compatible with the mutually beneficial Enhanced Equivalence model proposed by Barney Reynolds (a partner at Shearman & Sterling).

For more details on the #BetterDeal proposals, go to https://competere.co.uk/a-better-deal.