When Theresa May unveiled her Chequers Brexit blueprint eight weeks ago she warned that “pragmatism and compromise” would be required on all sides to deliver a deal. Instead, the plan has fractured her already divided party, dismayed Brussels and weakened her political authority yet further. So with only six months to go before the UK leaves, what are the scenarios for Britain’s departure and how do the Tory tribes of Brexit line up behind them?
Negotiations fail amid acrimony. Customs checks lead to backlogs disrupting supply chains and hitting food exports. Some flights are grounded and markets panic as EU-wide rules governing financial transactions lose their legal basis.
A ‘no deal’ deal
Negotiations stall with no prospect of resolution and both sides try to cushion “no deal”. Temporary and emergency co-operation is agreed to keep aircraft flying and trade going, especially in food and medicines. The mini-deals are temporary, deferring problems until permanent solutions can be negotiated.
WTO rules and a security deal
The UK agrees to leave under World Trade Organisation rules of trade with a security pact to ensure that Britain’s strategic relationship with the EU remains. Over time talks to negotiate a free-trade agreement begin. EU tariffs are quite low, averaging about 5 per cent, but under WTO rules they would be higher for British exports such as cars. This could drive manufacturers overseas and exporters would face barriers in complying with single market rules.
Transition and ‘Canada-plus’
A withdrawal treaty is agreed and, after a transition period, the government signs a free-trade agreement modelled on the EU’s deal with Canada, removing tariffs on almost all goods and reducing some non-tariff regulatory barriers. The EU’s price of a transition is to separate Northern Ireland from the rest of the British economy by keeping it in a customs union and aligning it with single-market rules. This could require a border in the Irish Sea.