Is it possible for a member state to leave the EU but retain full access to the internal market?

As an EU member state the UK is currently part of the EU internal market, which is one of the most advanced trade areas in the world and has been developed and extended since 1951. Originally referred to as the 'common market' it consists of a customs union with no tariffs on goods traded between member states and a common tariff for goods entering the EU from outside. In addition to the basic trade rules, it includes a network of more advanced trade related rights and obligations which are enforced by the European Courts.

Central to the internal market are the 'four freedoms' (free movement of goods, persons, services and capital) which are enshrined in the EU Treaties. The Treaty provisions establish these free movement principles which are further refined by a raft of internal market legislation designed to complete the creation of the internal market by abolishing any remaining trade barriers and creating regulatory harmonisation.

Access to the internal market is therefore about much more than removing tariffs on goods. So what does it mean, and is it possible for a member state to leave the EU but retain full access to this internal market? There are a number of existing alternatives to EU membership, each of which provide to a greater or lesser extent participation in the internal market and some of the EU's wider policies and related obligations. Furthermore, the EU has also agreed various levels of market access for goods and access in individual trade agreements with third countries.

A brief summary of these different models and their various implications are set out below. It is now up to the UK to agree on what kind of relationship with Europe should replace its EU membership and to negotiate with the EU what will hopefully be a mutually beneficial deal. Any new trade arrangement will be between the UK and the EU as a whole, and cannot be negotiated with the individual member states, as trade policy is an exclusive power of the EU. The EU Commission negotiates on behalf of the whole EU, in close cooperation with the Council and the European Parliament, who will need to approve the agreement. Where the agreement contains provisions that fall within the member states' jurisdiction, individual member states will also need to ratify the agreement under their national ratification procedures.

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Brexit – Impact on EEA insurers and non-EEA headquartered groups

The post below was first published on our Insurance blog

This briefing considers the position of EEA firms who wish to access the UK insurance market post-exit.  It also looks at the impact of Brexit on non-EEA headquartered groups that currently passport into the EEA via a UK subsidiary.

This briefing supplements our previous note “Access to the single market” – an explanation for the (re)insurance sector, which considered Solvency II rules on third country access to the EEA and the role of “equivalence” under Solvency II.

BREXIT: WHAT NEXT FOR BOARDS?

Businesses need to plan for the post-Brexit world using the best intelligence they can access. 

The UK’s vote to leave the EU has caused a shock to the currency markets, ushered in a period of unprecedented political change and prompted myriad questions for businesses. Although the shape of new arrangements will not become clear for some time, businesses need to plan for the post-Brexit world using the best intelligence they can access.

There are some practical steps that all businesses will now need to consider. But there are also some specific concerns for particular sectors, such as the financial services industry and the manufacturing sector. 

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