BrexitCentral: Remaining in the EU Customs Union after Brexit would be a political and economic disaster

After the Prime Minister’s Lancaster House speech in early 2017, it seemed that the idea of the UK staying in the EU’s Customs Union after we leave was dead and buried. But like Frankenstein’s monster, it seems that the mad scientists in the basement of the Treasury have been running 50,000 volts through the dead body of this idea and are attempting to resurrect a deformed version of it, variously described as forming “a” customs union with the EU (not, apparently, “the” Customs Union), or “shadowing” or “aligning with” the EU Common External Tariff.

But all these formulae come to the same thing. They all involve us giving up our right to set and decide the tariffs which are applied to goods entering the UK from the rest of the world. But it is not just about tariffs. Customs also operate a vast range of non-tariff controls on goods, all the way from health and other standards on food to, for example, permissible chemicals and safety of children’s toys.

The idea of all these various schemes is that if the UK continues to operate EU-conforming controls on goods which enter the UK from the rest of the world, then it will be unnecessary to operate customs controls on goods which flow from the UK into the EU27. But the price of any such arrangement, however it is dressed up, would be – necessarily and inevitably – that the UK would also have to continue to operate the vast panoply of non-tariff controls which the EU applies to goods which enter its external borders from the rest of the world.

This in turn means that the UK could not depart from these rules and regulations in relation to goods which are domestically produced and placed on the UK market. This is for two reasons. First, the EU would not accept it since such goods would circulate freely into the EU27 in the absence of customs controls. Secondly, it would be illegal under WTO rules for the UK to impose different and more disadvantageous standards on goods imported from the rest of the world compared with the standards applied to goods from domestic producers.

So “alignment” with EU external customs controls inevitably means that a vast swathe of rules and regulations governing the production of goods within the UK would have to be kept the same as the EU rules. And in addition, we would be required to change them to keep them in line whenever the EU changed their own rules. We would be unable to change them in order to benefit British industry or consumers, and would have to change them to match the EU’s rules however damaging the EU’s rule change might be to our interests. And, not being a Member State, we would have no vote on the rule changes.

To read Martin Howe’s piece for BrexitCentral in full, click here.

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