5 Brexit buzzwords: what do they mean for workers?

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Published date
02 Oct 2017
Image: Dave Kellam

Trade unions want a Brexit deal that delivers decent jobs and protects workers’ rights.

We’ve said that all options should remain on the table during negotiations, but at the moment, continued membership of the single market seems to be the best way to safeguard rights and jobs. And, at least in the interim, we support membership of the customs union as well.

But what does that mean?

To try to make things clearer, here's what you should know about the most-used and least-explained Brexit buzzwords. 

  1. ‘Tariff-free’

A tariff is a kind of tax, imposed by government on imports like cars (known as ‘goods’) which make them more expensive to buy.  Tariff-free trade between countries means they agree to not put these taxes on each others’ goods.  Currently there are no tariffs on trade in goods between EU countries and the UK.   

  1. ‘Barrier-free’

When people talk about ‘barriers’ to trade, they’re usually talking about the restrictions countries place on businesses that make it more difficult, and often more expensive to operate in other countries.  ‘Barrier-free’ trade refers to trade arrangements where businesses and service providers do not face extra requirements or paperwork to do business in other countries. 

Because the UK is a member of the single market, UK businesses face few barriers when they operate with other EU countries. 

In contrast, a company from outside the single market, like Australia, faces additional restrictions when they operate in the EU.   

  1. ‘Single market membership’

The EU single market is a free trade area, which countries can join as members. 

Members agree to not impose tariffs on goods from other member countries and to not impose barriers on many business activities of other member countries.

All EU countries, as well as Norway, Iceland and Lichtenstein are members of the single market. 

A condition of this free trade is that members must produce goods to the same standards and follow the same rules on areas such as health and safety and workers’ rights.  The intention is to create a level playing field between countries, so that one country doesn’t undercut another by lowering its standards.

 Members of the single market implement EU laws to ensure they have a common framework of standards.  EU law has led to many protections for workers being incorporated into UK law, including rights to 28 days of paid leave and equal rights for part-time workers.

Countries that aren’t members of the single market can still trade with members.  This is sometimes referred to as ‘access’ to the single market.

However, non-members of the single market face tariffs and barriers to trade, which can be very high.

China, for example, has access to the EU single market but faces, on average, 10% tariffs on cars it imports to the EU. 

Also, a key point for trade unions is that if the UK only has ‘access’ rather than continued membership of the single market, there’s no guarantee that the workers’ rights contained in EU law would continue to protect British workers.

That’s why the TUC is calling for the UK to continue being a member of the single market as it would provide a legal guarantee that workers in the UK are protected by the same level of rights as those found in the EU.

Membership also provides tariff and barrier-free trade with the rest of the EU that supports millions of jobs in the UK.

  1. Customs union

The UK is currently in the customs union with other EU countries.  Countries in the customs union don’t have to conduct customs checks or fill out paperwork to show where goods were made. 

Countries in the customs union all impose the same tariffs on goods from countries outside the customs union. 

Leaving the customs union would cause delays to trade because of customs checks and other barriers. Businesses report that those delays would cost jobs, which is why the TUC is calling for the UK to stay in the customs union, at least for an interim period.

  1. The WTO option (aka ‘the cliff edge’)

The World Trade Organisation (WTO) is the international body that sets the rules for global trade.  If no deal is agreed with the EU in Brexit talks, the EU would then apply the same tariffs and barriers to trade with the UK as it does to every other WTO member that it doesn’t have a trade deal with.

Some of these would be damagingly high.  Cars, for example, would face tariffs of 10%. This would make cars approximately £2300 more expensive for consumers in the EU to buy.

WTO members also don’t have to commit to respecting workers’ rights and the WTO doesn’t penalise members that abuse workers’ rights.  Members of the WTO include China and Colombia, some of the worst-ranking countries when it comes to workers’ rights. 

To ensure the UK doesn’t fall off the cliff edge and have to trade by WTO rules alone, the TUC is calling for transitional arrangements to be in place between the UK and EU if there has been no deal agreed in the two year time frame given by Article 50.  

This must guarantee continued membership of the single market and customs union to protect jobs and provide legal guarantees that workers in the UK will continue to be protected by EU employment rights, both now and in the future.