For all the debate, uproar and resignations over the draft Withdrawal Agreement between the UK and EU, it’s worth remembering that the future EU-UK trade deal has not yet been decided. This will only be negotiated in detail after the UK leaves the EU on March 29 2019. What it will look like is very much still up for discussion and Theresa May could yet keep the promises she made in her Brexit white paper back in February 2017. This includes leaving the single market and customs union, signing a trade deal that ends free movement of people and remove the UK from the European Court of Justice’s jurisdiction.
Ever since Brexit was on the cards, comparisons have been made between the UK and a number of countries that have a close working relationship with the EU. Norway, Switzerland, Canada or a hard, WTO rules-only Brexit have been the options most commonly put forward for the UK to follow. But there is one option that has largely been absent from discussion: Ukraine.
A country that conjures images of its ongoing conflict with Russia, Ukraine might not sound like somewhere that the UK wants to copy. Yet the style of Ukraine’s relationship with the EU is one that aligns with the prime minister’s objectives, as outlined in her white paper. While many of these did not make their way into the Withdrawal Agreement, they could still form part of the future trade agreement that the UK is yet to work out with the EU.
According to our research, a Ukraine-plus agreement is feasible and could achieve:
* An end to EU law applying in the UK
* No free movement of people
* Access to the EU single market
* The ability to make its own trade agreements with third countries
* Collaboration with the EU on security and defence policy
Ukraine, like Canada, has a deep and comprehensive free trade agreement with the EU (DCFTA). This gives it preferential access to the EU’s 500m strong consumer market. The Ukraine-EU agreement eliminates more than 98% of trade duties for both parties.
The DCFTA is complemented by a process of legal adjustments in the number of laws that regulate financial services, telecommunications services, postal and courier services, and international maritime services. If the UK had something similar, this would smooth over the key barrier to trade for Britain’s all-important service sector.
The provision on free movement of capital in the DCFTA also includes standard safeguards to ensure the stability of both side’s financial systems. Moreover, dispute settlement and mediation mechanisms are in place and a panel can make recommendations to the Association Council, a body created to govern EU-Ukraine affairs, in case of dispute or any further proposals for cooperation. Plus, the EU supports Ukraine through a financial and technical assistance programme that helps small and medium-sized enterprises (SMEs) in particular.
There is visa-free travel between Ukraine and most EU member states but no right of free movement of people, which limits migration from Ukrainian citizens. They are allowed to travel for up to 90 days in a 180-day period for tourism, business purposes and to visit friends and relatives. Something similar would help the UK to achieve one of its main objectives of “controlling its borders”.
A Ukraine-plus agreement for the UK could also have security elements, as well as maintaining cross-border crime and terrorist collaboration. The EU-Ukraine agreement provides defence, military and political stability considerations that can provide a good example for a EU-UK agreement. The UK’s strength in security and defence are both features the EU will want to keep close links to. Maintaining political stability on the island of Ireland will, of course, need special considerations in the case of a UK-EU agreement.
The DCFTA is much more than a classic free trade agreement. It opens markets through the progressive removal of customs duties and restrictions on services and public procurement. It also ensures fair competition between EU and Ukrainian firms by safeguarding workers’ rights and environmental standards, as well as respecting intellectual property rights and competition law.
When it comes to laws, the DCFTA lays the groundwork for the gradual alignment of Ukrainian norms and standards on food safety and technical regulations with the EU. Seeing as the UK is already aligned on these but wants to reduce EU influence over its laws, this can likely be open for negotiations in a Ukraine-plus deal.
A Ukraine-plus arrangement could therefore be the deal that May is looking for – no European Court of Justice oversight, a trade deal that does not include free movement of people, room for third country agreements and security and defence collaborations. This could achieve most of May’s white paper objectives and appeal to the different factions in her party.