British PM Theresa May has finally confirmed that Britain will begin formal Brexit negotiations in March 2017, a process that is expected to last for two years. This comes after months of being reluctant to give a confirmation on the same. The confirmation has however elicited speculation on the kind of relationship the UK intends to develop with its partners after Brexit. According to speculators, the UK has two main options dubbed Hard and Soft Brexit.
What is Hard Brexit?
As the name suggests, a Hard Brexit would be a post-Brexit arrangement whereby the UK takes hard-line positions on migration and EU jurisdictional issues. A Hard Brexit arrangement likely results in the UK giving up full access to customs union with the European Union as well as full access to the EU single market. A Hard Brexit arrangement is likely to focus on giving the UK 100% control over its borders. The UK would also have the freedom to make new trade deals as well as apply laws (within its territory). This arrangement has both pros and cons.
Hard Brexit pros
The UK stands to become a global trading nation in a Hard Brexit arrangement. This is according to Liam Fox, International Trade Secretary. Many global business leaders have also expressed similar sentiments. Many global business leaders agree it is better for the UK to have hard Brexit arrangements that work fully than having arrangements that need to be renegotiated or are uncertain. A hard Brexit arrangement is expected to remove all uncertainties that have surrounded key issues on trade and immigration.
Hard Brexit cons
Although a Hard Brexit is expected to have more pros than cons in the long-term, Hard Brexit arrangements on trade and borders could see the price of British goods and services increase resulting from new tariffs. When the UK executes a full Brexit, the cost of goods such as exported cars may increase slightly stiffening competition. Sectors like agriculture also stand to be affected when the UK loses protections on cheap agricultural imports from abroad.
Bureaucratic checks may also increase when the UK leaves the customs union. It will be harder for UK goods to pass through airports and ports in the EU. Considering some countries i.e. the U.S. have given the EU priority in regards to new trade agreements made post-Brexit, the UK is likely to be on the losing end. It is, however, worth noting that Hard Brexit cons can easily be gotten rid off if the UK purposes to negotiate exceptionally. It will depend solely on the final Brexit negotiations and deals signed by the UK and its partners in the next two years.
What is Soft Brexit?
As the name suggest, a Soft Brexit arrangement would be a post-Brexit arrangement whereby the UK takes a softer stand on key Brexit issues. For instance, a Soft Brexit arrangement is likely to see the UK leaving most of its relationship with the European Union intact with very little to no drastic changes. In a Soft Brexit, the UK would, of course, seize being an EU member but maintain access to the single market.
In regards to trade, a Soft Brexit would see the UK continue to trade with EU states on tariff-free basis. Britain would also remain in the European Union’s customs union eliminating the need for border checks. In a nutshell, Britain would be expected to enjoy arrangements similar to those of countries like Iceland and Norway that are not EU members but enjoy single market access given the fact that they are part of the EEA (European Economic Area).
In return, Britain would be expected to continue accepting freedom of movement of people, goods, service and capital from the EU and be subject to some EU laws as is the case with current Switzerland and EU treaties.
Soft Brexit pros
A Soft Brexit arrangement will maintain the most important UK-EU connections i.e. on trade and borders reducing long-term Brexit risks that the UK hasn’t anticipated. A Soft Brexit is expected to eliminate many economic uncertainties eliminating unnecessary shocks.
Soft Brexit cons
Many people argue that the UK won’t reap the full benefits of Brexit through Soft Brexit arrangements. Some experts argue that Soft Brexit arrangements are a continuation of past arrangements. Nothing will change for the better. Furthermore, there are no negative effects being felt since Brexit as earlier anticipated. In fact, things have improved since the final Brexit vote was cast according to many global institutions including the Bank of England.