UK: What will the trading arrangement look like? - ING

'Imaginative', 'creative' and not 'off the shelf' were all phrases used by Prime Minister May in September to describe the bespoke trading arrangement she'd like to agree with the EU, points out the research team at ING.

Key Quotes 

“The European Economic Area (EEA) option would require free movement (a big red line). The free-trade option, like the Canada-EU deal, would get around this by allowing the UK to control migration, and enable it to strike separate trade deals with other countries. But crucially, access to services (including finance) is notoriously difficult to negotiate as part of free-trade deals. This is why David Davis is now talking about the need for a "Canada plus-plus-plus" arrangement that includes services, which accounts for more than 70% of the UK economy.”

“So can the UK agree on a half-way house? Well, clauses embedded in existing free-trade deals mean that whatever the EU offers the UK on services, it would also have to offer to other countries that it already has agreements with (Canada and South Korea for example). This means there is a reduced incentive for the EU to offer the UK a bespoke deal, which makes it more likely the UK will ultimately have to choose between the Canada-style free-trade agreement or the EEA.”