The United Kingdom is torn between a Brexit to the Australian or the Canadian

Guillermo Ximenis

London, Oct 17 (EFE) .- With the negotiations between the United Kingdom and the European Union (EU) at their climax, the two relationship models that have remained on the table after several years of tug of war are reduced to two , a trade agreement like Canada’s, or resigned to operate without a specific agreement, like Australia.

British Prime Minister Boris Johnson often uses the term “Australian-style pact” as a euphemism for the nuclear option of an abrupt Brexit, a path that most economists say would be especially damaging to UK finances.



This week he insisted that he is willing to adopt that model on December 31 if Brussels does not make concessions in areas such as the distribution of fishing quotas and the rules on state aid that the 27 require compliance in exchange for favorable access to their market. 450 million people.

The conservative president has long ruled out a more ambitious association with the EU such as that between Norway, which makes contributions to the EU budget and complies with much of the European regulations to gain unrestricted access to the single market.

These are the main characteristics of the possible models:

– AGREEMENT TO THE CANADIAN

In 2017, the free trade agreement between the EU and Canada, known as CETA, began to be provisionally applied, which eliminates most of the tariffs in the exchange of goods, although not all – they are maintained, for example, for meat and the eggs-.

The agreement expands trade quotas between the two territories, although it does not completely eliminate them either.

Under a similar framework, the United Kingdom would stop paying contributions to the community budget and would regain control of immigration, among other aspects that Johnson wants to prioritize, but it would be forced to establish border controls and other trade barriers that have not existed between both sides. of the English Channel in recent decades.



One of the most problematic aspects of this option is that it does not contemplate mutual access for financial services, one of the main pillars of the British economy.

UK negotiators have used terms like “Canada plus”, or even “super Canada plus” to refer to a free trade agreement that includes facilities for the British financial industry to continue operating on the rest of the continent.

– PACT TO THE AUSTRALIAN

Australia does not have a free trade agreement with the European Union, but only a Framework Cooperation Agreement, so close that it obliges both territories to have the majority of their exchanges governed by the generic rules of the World Trade Organization (WTO). .

In practice, this model implies almost completely nullifying the trade cooperation between the UK and the EU that has been in place for the last 40 years.

UK exports and imports would be subject to tariffs, UK companies would not have preferential access to the single market and UK banks would lose their right to operate in the Union.

Among other effects, such an arrangement could skyrocket the prices of cars and some foods such as cheese, milk and meat in the United Kingdom, in addition to making it difficult for industries located in the British Isles with assembly lines to function. that depend on their pieces crossing the border without friction.



– THE DISCARDED NORWAY MODEL

Johnson puts the UK’s ability to legislate without outside interference in areas such as immigration, fishing and state subsidies before keeping customs open with the European Union.

For this reason, he rejected since he arrived in Downing Street the possibility of joining the single market as an external country, as Norway has done, which belongs to the European Economic Area (EEA), but not to the EU.

Oslo makes substantial contributions to the EU budget and is obliged to abide by much of European regulations in exchange for unrestricted commercial access, something the British prime minister has flatly ruled out. EFE

gx / ig



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