Brexplainer: Do you know your single market from your customs union?

Don't know your single market from your customs union? Your Canada-style free trade agreement from your 'Norway option'? Here's a quick guide.

Terms like customs union, single market and free trade deals are common currency in the Brexit debate
Digital staff

Efforts by the British government and EU to reach agreement on the shape of post-Brexit relations have so far foundered on the future of the Irish border.

The British government wants to strike a new trade deal outside the strict rules of the single market and customs union, with arrangements between the EU and Canada and Norway often cited as potential models.

However, the EU has insisted on a guarantee that the border between Northern Ireland and the Republic remains free-flowing - the so-called 'backstop'.

Suggestions that the north could remain in a customs union and parts of the single market, acting as a 'bridge' between the EU and UK, have been rejected by the DUP and British government because they would create new barriers at the Irish Sea.

Here is an explainer of some of the terms at the centre of the debate.


Single market:

The European Commission defines the single market as "one territory without any internal borders or other regulatory obstacles to the free movement of goods and services".

In practice this means seamless trade without tariffs, quotas or other taxes, as well as the standardisation of many other rules and regulations. Crucially, it also requires the free movement of EU citizens to live and work in other member states - a key sticking point for many Brexit supporters.

Norway, Iceland and Liechtenstein are members of the single market but not the EU.

 A map showing the members of the single market, with non-EU states Iceland, Norway and Liechtenstein coloured yellow. Image from European Commission


Customs union:

A customs union is an agreement between two or more countries to remove tariffs and checks on each other's goods, and also to apply common tariffs on goods from other countries.

Importantly, this avoids disruption to businesses operating across internal frontiers such as the Irish border.

But while it would be possible for the UK to remain in a customs union with the EU without being a member, as Turkey does, this would limit its freedom to strike its own trade deals around the world.

 The EU customs union. Image from European Commission.


Canada-style free trade deal:

The Comprehensive Economic and Trade Agreement (CETA), signed by the EU and Canada in 2016 following seven years of negotiation, removes almost all tariffs from traded goods and has been advocated by some leading Brexiteers as a model for a new relationship between the EU and UK.

However, it does not remove all regulatory checks, meaning some hardening of the Irish border would seem inevitable.

Meeting obligations to retain an invisible border would instead require checks at the Irish Sea, a prospect vociferously opposed by the DUP.

Boris Johnson has advocated a Canada-type free trade deal


Norway-style option:

Norway is part of the European Economic Area but not the EU. This makes it a member of the single market and ensures mostly tariff and barrier-free trade, with the ability to still strike independent trade deals outside Europe.

However, it also means making a financial contribution to the EU and being subject to free movement of people and many other laws without being able to influence them as a member state.

Norway's position outside the customs union also means some checks on its border with Sweden for products originating outside the country.

 Norway is a member of the single market but not the customs union, meaning some checks on the border with Sweden for products originating outside the country. Image from BBC

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