After Brexit what next for Britain's trade

After the (disastrous) result of the UK's vote to exit from the EU a good question is what trade arrangements can be made for the future.

The EU operates a 'single market'. There are no restrictions on the movement of goods, services, people or money. This is a completely 'free trade area' and the countries that operate with the Euro as their currency also eliminate any exchange rate transaction costs.

The UK sends about half it's exports of goods to the EU. The services sector is the crucial one however, with the City of London (the financial sector) easily the most important single part of the UK economy.

The UK now finds itself back at the basic level of trying to negotiate trade deals with the EU and replace all the trade deals that cease to exist with the rest of the world when leaving the EU.

There are a hierarchy of arrangements, from simple bilateral 'concession deals' with individual countries, to Free Trade Areas (which cover goods not services) right up to full access to the EU's single market (but at a cost).

The BBC sets out five alternative new models for the UK/EU trading relationship. It is rare to have the chance to pick where on the ladder of trade agreements you will sit. The pro's and cons of each arrangement need to be carefully considered.

What is clear is that none of the five options the BBC outline will prove acceptable to those who voted 'Leave' in the British referendum and simultaneously protect the UK's vital services sector. I hate to say 'I told you so', Brexiters.

The BBC article is here

This article has relevance to both IB and VCE. VCE students can apply it to the deals made by Australia in recent years and the TPP proposal to look at their pros and cons. For IB the article is essential reading, partly for the theory and application, but mainly because this is exactly the sort of thing you would set questions about in Paper 2!