(Bloomberg) -- Labour leader Jeremy Corbyn gave the clearest picture yet of the U.K. opposition's plan for Brexit -- and the European Union likes it better than Prime Minister Theresa May's vision.
Here is everything you need to know to compare the two rival plans.
What does Corbyn want from Brexit?
Essentially a much better version of what Turkey has. Negotiate a new customs union with the EU to avoid trade tariffs, and ensure a soft border between the U.K. and the Republic of Ireland.
A customs union is far short of being a member of the single market, meaning that the U.K. wouldn't have to observe the EU's four freedoms -- of people, goods, services and capital across borders -- or make budget contributions. It would also end the jurisdiction of the European Court of Justice over the U.K.
What are the limitations?
It removes the option of signing trade deals with third countries -- something the Brexit backers are adamant they must be able to do. And it risks opening the U.K. up to goods from any country with which the EU strikes a trade deal, without the U.K. having a role in the negotiation. Those third countries would be under no obligation to reciprocate, making tariff-free access a one-way street. Corbyn said he would insist the U.K. had some say in any such deals and wouldn't end up as “mere rule takers.”
Corbyn also hinted that he's less wedded to signing trade deals with third countries than the Conservatives, arguing on Monday that even agreements with China and the U.S. would be unlikely to make up for any damage to EU-U.K. trading relations.
Will the EU like it?
Two people familiar with the EU's Brexit negotiations said Labour's idea would likely be received positively because it would be seen as beneficial to EU businesses. The EU would probably be prepared to give the U.K. a better customs arrangement than Turkey, though Brussels would probably insist on conditions including some level of free movement of EU workers to the U.K. continuing.
Corbyn's comment that he would not be committed to any “bogus” immigration targets -- a clear reference to the Conservatives' target of reducing it to the “tens of thousands” -- suggests there's room for a Labour government and the EU to reach a compromise.
How did the Tories react?
Brexit Secretary David Davis went on the attack even before Corbyn opened his mouth: “Labour may think they have stumbled across a simple solution to Brexit, but there is a lesson they are yet to learn: if it looks like snake oil, and it smells like snake oil, don't expect it to make you feel better.”
Trade Secretary Liam Fox called it a “cynical attempt by Labour to try and frustrate the Brexit process.” Both Fox and Davis represent the anti-EU elements in her Cabinet. More pro-EU members of her party want a customs union too.
George Osborne, the pro-European former chancellor and current editor of the Evening Standard, said Corbyn had “maneuvered himself into a more pro-business, pro-free trade European policy than the Tory government.”
So what does May's government want?
Davis described it as “Canada plus the best of Japan, the best of South Korea and that the bit that is missing, which is the services.” What it would be is a free-trade accord that allows May to regain control of immigration and negotiate its own trade deals. It would be “bespoke” because in May's mind it would include financial services.
She has ruled out remaining part of either the single market or any form of a customs union. Her government will ask to keep the bloc's regulations “on a voluntary basis” for key industry sectors such as car-making. Basically it will pick and choose where it wants to stay close to the EU.
What are the risks?
This model doesn't resolve the riddle of how to prevent the introduction of a hard border between the U.K. and the Republic of Ireland, something the EU has ruled out as it could undermine the peace agreement that ended decades of violence in Northern Ireland. Then there is the detail that the government is simply cherry picking, which the EU has said it won't tolerate. To allow it would be to encourage others to leave.
So what has the EU said?
EU President Donald Tusk came down hard: “I'm afraid that the U.K. position today is based on pure illusion. It looks like the cake philosophy is still alive.” He's likely to tell that to May in person too on Thursday, ahead of her speech on Friday.
To contact the reporter on this story: Stuart Biggs in London at sbiggs3@bloomberg.net.
To contact the editors responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, Emma Ross-Thomas
©2018 Bloomberg L.P.
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