In what looks like a blow to our future trading relationship with the EU, Theresa May’s customs arrangement has been rejected by Michel Barnier. However, this does not necessarily signal an impasse. In his statement, the European Chief Negotiator stated that the EU is open to creating a customs union with the UK.
Yesterday’s rejection doesn’t come as a surprise. Theresa May’s plan was complex, unworkable and frankly a needless compromise between two sides who couldn’t agree what 1+1 equals. It’s time for the Prime Minister to stop placating certain Brexiteers who remain absent from reality and instead focus on securing a viable deal that guarantees Britain’s economic future.
Negotiating “a” customs union with the EU, rather than “staying in” has been a Labour policy since February and could be the saviour of Brexit. It marks a sensible, solid policy that will both achieve what the voters wanted and keep trade free and our economy strong. Indeed, A customs union really does solve the growing number of sizeable problems that are approaching post-Brexit. The EU have also stated they are open to such arrangement.
Crucially, such a policy would solve the Irish border problem by creating an economic setup that does not require customs check on the border. This is the primary cause of the problems for May, as, solving the Irish border problem without waving at least some customs checks is practically impossible. The arrangement she devised was undoubtedly weak, to the extent that the Brexiteers she designed it for – like Boris Johnson – were vehemently opposed to the plan.
A customs union also guarantees zero tariffs between the UK and the EU. That Brexit cliff edge that so many businesses, especially those in manufacturing, have become scared of would no longer pose a threat. With goods moving freely between the EU and the UK, the issues that Airbus and Jaguar foresaw post-Brexit would vanish.
Despite retaining tariff-free trade, the controversial ‘free movement’ would also end. Most in the Leave camp see this as a positive, although some Remainers are not so keen. We would also be free of the rule of the ECJ, the institution that Brexiteers so adamantly decry. The two aims of Brexit, then, would hereby be achieved; the preservation of sovereignty and control of immigration. Furthermore, unlike solutions involving the Single Market, we would not be paying into EU budgets.
With the targets of Arch-Brexiteers and Democratic-Brexiteers met, the drawback? International trade. Though we are not joining the customs union, due to the nature of a customs union, signing independent trade deals would become more difficult.
This can be seen as a negative, but not entirely. The deals that we would have been able to make with the US and emerging markets – that Brexiteers often champion and the EU is unwilling to do – would only be achieved by the UK lowering standards in certain areas. Such an act could well be detrimental to the environment and worker’s protections.
Ultimately, the EU is good at making deals as it’s agreements with Canada and Japan demonstrate. With the US wanting ‘zero tariffs’ with the EU, would being outside these deals be good for the UK? Do we really believe we have more bargaining power on the world stage than the largest tariff-free economic area in the world? Current negotiations will soon provide us with the answer.