Business

Single market access - what does it mean?

Lines of new ew cars and trucks Image copyright PA

Business leaders are calling on a future government to ensure continued "access" to the EU's single market following the referendum but what does that short but significant word mean?

As the prime minister has pointed out "access to the single market has many potential different meanings".

Japan and the US have "access" and, as one economist told me, even Haiti does.

Countries outside the EU have to negotiate trade deals, pay tariffs, get through customs and abide by EU rules.

This is all done without the advantage of having a say on those rules.

'Best access'

By comparison at the moment we are members of the EU's single market and have been for decades, which offers us totally free movement of goods, finance, and people around the EU, without any tariffs.

We also have influence on how the rules are written.

That's why much of business thinks "access" should mean "membership of" the single market, or what David Cameron called the "best access".

That is why the head of the Society of Motor Manufacturers and Traders, Mike Hawes, said: "80% of what we produce is exported and the only way to succeed is through unrestricted and reciprocal access to the EU and global markets."

By "access" Mr Hawes means "membership" of the single market.

And it is not just carmakers that are worried about "access".

Inevitable change

On Wednesday, Jeroen Dijsselbloem, president of the Eurogroup of EU members, was asked what the consequences of Brexit might be.

He replied: "London and its financial service industry is servicing all of Europe now.

"They do that with the passport that gives them access to all the markets in Europe without any further bureaucratic hassle or other permits required and all of that will change.

"London has grown as a financial centre because of its position in Europe.

"Many Asian investors, other international institutions have come to London to service the European market from London and that position will inevitably change," he added.

Inevitable is a strong word.

The UK will work hard to negotiate the best possible access for all its industries and that could involve membership of the single market.

That is quite achievable.

Complicated negotiations

Other countries are already in the single market without belonging to the EU, but they all allow free movement of EU citizens and pay into EU funds.

Leave supporters believe we can cut an especially favourable deal, but the SMMT also wants the UK "to shape EU regulations on the cars we drive" but that will be much more difficult once we are no longer members of the EU.

It shows how complicated the negotiations will be and how worried business is when people talk about "access" to the single market.

It is as if it is the answer to all their worries, but as the prime minister said, it depends on what you mean by "access".

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