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15 August 2017

The Brexit customs union plan reveals the government is in fantasy land

All this proposal does is shift the cliff edge for businesses back from 2019 to 2021. 

By Chris Leslie

The government’s position paper on our customs arrangements with the EU after Brexit, released today, is characterised by fantasy and wishful thinking. It operates under the pretence that we can leave the biggest free trade bloc on earth, which buys nearly half of everything we sell as a country, without damaging the economy or putting jobs at risk. And it assumes that we can negotiate the same benefits as being in the EU customs union while leaving it. This just isn’t tenable. I believe, along with many MPs from across the House of Commons, that the only way to retain these benefits is to stay within the customs union.

These discussions about customs arrangements might sound technical and dull, but they are of vital importance. British exports to the EU are worth over £200bn a year to our economy, supporting millions of jobs. As part of the customs union, these exports are completely free and frictionless. Our companies do not need to pay tariffs when they export to Europe, meaning that selling a British car in Berlin is as simple as selling it in Birmingham. And they do not face time-consuming, costly customs checks on every product they sell to the EU. 

The government’s position paper seems to be pretending that these benefits can be retained despite leaving the customs union. They say that they are seeking to achieve “the most frictionless customs arrangement anywhere in the world”. Well, Britain is already a part of that, and it is called the customs union. The idea that Britain can leave that organisation, negotiate the exact same benefits as membership, and then go around negotiating new trade deals with other countries, is just nonsense.

The European Union has been quite clear about this. In response to the government’s paper, the European Commission stated the fact that “frictionless trade is not possible outside the single market and customs union”. Guy Verhofstadt, the European Parliament’s point person on Brexit, dismissed the Government’s plan as “a fantasy”. I want Britain to get the best deal possible, one that ensures that our economy is undamaged and jobs are not lost. But for that to happen, we need to adopt positions based on the reality of the negotiation, rather than wish lists that are dismissed the moment they are released.

It is true that the government has effectively conceded we will stay in the customs union for a transitional period, likely to last two years, after we are meant to leave the EU in March 2019. This is a welcome victory for the realists in cabinet, like Philip Hammond, and a defeat for those who until recently were talking of a clean break at the end of the Article 50 period. But all this proposal does is shift the cliff edge for businesses back from 2019 to 2021. As to the future of UK-EU customs after that point, the government’s proposals are incredibly vague, and seem to rely on new technology emerging to minimise customs checks on goods passing across the Channel. Transition is a stay of execution, but nothing more than that.
 
We should be absolutely clear that the only way to preserve free and frictionless trade with the European Union is continued membership of the customs union, as well as the single market. Only that can ensure that Brexit will not damage our economy and put jobs at risk. As a matter of urgency, the government must change course and put these options back on the table in the Brexit negotiations.

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Chris Leslie MP is a leading supporter of the Open Britain campaign

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