What happens if we leave the single market?
Britain's business landscape will, without a doubt, be a very different place in five years' time. As the latest reports from Brussels signal progress in setting out a plan for the post-Brexit UK, we examine one of the main points of economic contention: membership of the single market.
What is the EU single market?
The single-market concept encompasses the legal provisions that allow free movement of goods, services, capital and labour between EU countries.
This means that British businesses can currently trade freely with most of Europe, benefitting from no tariffs, reduced fees and less administration work as everyone operates under one set of rules.
What is the customs union?
The customs union simply ensures that EU states charge the same import duties to non-members across the board. The US, for example, pays the same tariffs to the UK as it does to Germany or Greece.
Membership prohibits the UK from independently signing new trade deals, though it is important to note that EU states do not have to sign up to the customs union in order to be included in the single market.
What happens if the UK leaves?
On the surface, relinquishing a position in these groups would mean that the UK pays more to trade with the EU but is able to negotiate its own deals with other countries and dictate independent rules for the flow of goods and people.
Given that a huge proportion of the UK's trade is with other EU members (around 44%), a significant increase in costs and red tape could have an immense impact on the economy. In addition, as a lone negotiator, the UK may appear less attractive as a trade partner for other nations post-Brexit.
The latest developments in Brexit negotiations seem to confirm a two-year transition period where the UK will remain in both the single market and customs union while new regulations are decided. A 'semi-membership' also appears to be on the cards for Northern Ireland alone, though is highly dependent on how the full regulatory structure aligns.