UK Wants
'Customs Partnership' With The EU As Government Backs Away From Hard Brexit
The UK’s
customs rules could still be imposed by Brussels after Brexit, the Government
has revealed as it outlined plans for a trade “alignment” with the EU.
Ahead of the
launch of a new paper on the UK’s future trading relationship with the bloc,
the Department for Exiting the EU announced two possible solutions for life
after leaving the customs union.
One scenario
would see a border managed by the UK – which the Government describes as a
“highly streamlined customs arrangement”.
The other
would see no border with the EU at all, as the UK would be in a “customs
partnership” with Brussels.
This
arrangement, described as an alignment, could potentially see the UK mirroring
the EU’s customs arrangements – meaning if Brussels makes changes, Britain
would be forced to adopt them.
The paper
also claimed the UK could be in a “temporary customs union” with the EU after
March 2019 - seemingly contradicting a vow from Chancellor Philip Hammond
and International Trade Secretary Liam Fox that Britain will be “outside the
customs union” after that date.
Economist
Ruth Lea – a former civil servant who campaigned for Brexit – branded the call
for a temporary union “rather extraordinary.”
She told
HuffPost UK: “That seems to fly in the face of what Liam Fox and Philip Hammond
were saying in the Sunday Telegraph - I don’t know how they square it.”
“They do
keep giving out conflicting signals
Theresa May
set out her Brexit vision in a speech at Lancaster House in January (KIRSTY
WIGGLESWORTH via Getty Images)" />
Prime Minister
Theresa May confirmed the UK would leave the customs union – which ensures
non-EU imports are subject to the same tariffs across the bloc – in her
Lancaster House speech in January.
A House of Lords report published in March warned the
imposition of customs checks could damage the annual £357 billion trade between
the UK and the EU, and businesses could be hit financially thanks to increased
bureaucracy.
If the UK is
unable to strike a deal with the EU within the two-year period set out by the
Article 50 withdrawal process, the two markets will fall back to World Trade
Organisation rules.
This could
see cars being sold to the EU hit with a 10% tariff, alcohol with an almost 20%
tariff, and dairy products with a more than 36% tariff.
The
Government’s “future partnership paper” on the customs union is set to be
published on Tuesday, and will set out details of a “time-limited” transitional
period before the new arrangements kick in.
“One
possible approach would be a temporary customs union between the UK and the
EU”, an overnight briefing said ahead of the full paper being published.
When it
comes to the post-interim period arrangement, the briefing states:
“Our goal is
to secure as frictionless trade as possible with the EU alongside the ability
to forge trade deals around the world, and avoiding a hard border with Ireland.
“We are
proposing two different ways that would best meet these goals achieve this:
·
A highly streamlined customs arrangement in which the UK would manage a new
customs border with the EU, streamlining and simplifying requirements to the
fullest extent possible through negotiated and unilateral facilitations which
reduce and remove barriers to trade; or
·
A new customs partnership with the EU, based on alignment of our customs
approaches, which would negate the need for a customs border between the UK and
the EU.”
Lib Dem Brexit
spokesperson Tom Brake claimed trade deals already mooted by the Government
would render the “no border” option impractical.
Brake said:
“Liam Fox’s plans to drop the ban on chlorinated chicken would mean customs
checks by the EU. They will rightly want to stop dodgy chicken and other
products coming in via the UK.
“The bottom
line is we’re either in the customs union or not - you can’t be half pregnant.
“The only
way to prevent barriers to trade with the EU is to stay in the Customs Union
and Single Market.”
His comments
echoed those of Labour’s former Shadow Chancellor Chris Leslie, who branded the
paper’s suggestions as “wishful thinking of the highest order”.
The Open
Britain supporter said: “It looks like the new unified position in the Cabinet
is to return the Government to the territory of wanting to have their cake and
eat it.
“Ministers
claim we can leave the Customs Union and yet still achieve ‘the most
frictionless customs agreement anywhere in the world’ but with absolutely no
detail about how such a miraculous new system will be achieved.
“It is a
fantasy to pretend we can have the freest and most frictionless trade possible
with our largest partner when the Government remain intent on pulling Britain
out of the Customs Union.”
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Leading
business groups welcomed the report for providing much needed clarity in an
area of concern for companies across the UK.
Josh Hardie,
CBI Deputy Director-General, said: “It’s encouraging to see that these papers
propose a time-limited interim period and a customs system that is as
barrier-free as possible.
“We at the
CBI have always been clear that new ideas on crucial issues like this should be
brought to the table quickly.
“But the
clock is ticking and what matters now is giving companies the confidence to
continue investing as quickly as possible.”
Hardie
added: “To secure frictionless trade, negotiations on regulation, tariff and
non-tariff barriers will have to take place. All efforts should be made to
deliver a single-step transition, so that businesses don’t have to adapt
twice.”
Dr Adam
Marshall, Director General of the British Chambers of Commerce (BCC), also
called for a “smooth transition”, adding: “For most of the businesses we speak
to, clarity on the UK’s future customs arrangement with the EU is significantly
higher on their priority list than the swift negotiation of new free trade
agreements.
“For that
reason, business needs to see the government’s resources focused on the
conclusion of a successful customs deal with the EU.
“At this
stage, it is critically important to keep a number of different options open in
order to achieve this goal.”
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