Government proposals for a transition period after Brexit in which it would continue its current customs arrangements are a significant departure from ministers’ pledges that Britain would leave the customs union entirely after May 2019.
Two options are set out in the position paper on future customs arrangements. One is a new customs partnership with the EU which would remove “the need for a UK-EU customs border”, which the paper acknowledges would be an “unprecedented approach” and “challenging to implement”, and the other a “highly streamlined” customs arrangement between the UK and the EU achieved through negotiated and unilateral measures designed to reduce and remove “barriers to trade”, and allow frictionless movement of products across borders by making use of (unspecified) new technology to speed up their processing.
It is unclear, like so much else in this paper, whether that technology, which needs to be in place now but clearly isn’t, already exists, is in development or is just wishful thinking, and whether the costs of it will be passed on to business – and importantly who will pay for it? I can’t see the other EU 27 countries stumping up for such a venture – they would almost certainly tell Britian – “you want it; you pay for it”.
Either way, Brexit secretary David Davis appears to think the UK can negotiate and sign trade deals with non-EU countries, including the United States, while staying in a European customs union, albeit not the same customs union as it has left, but more an Alice in Wonderland replica of it and one that only the UK can be a member of. This might be possible legally, but whether the EU would allow it politically seems doubtful.
The EU council will not even give Michel Barnier, the chief Brexit negotiator, a mandate to discuss customs union issues until “sufficient progress” has been made with the “divorce bill” and the border with the Republic of Ireland.
That aside, what is being proposed in this ‘streamlined option’ is a dual system by which the UK can import goods freely from wherever the UK has struck a trade deal, but cannot then export them into the EU without additional duties and checks.
Clearly these confused and almost certainly uncosted proposals represent panic stations and many crossed fingers following the criticism by industry and Unite, in particular the auto, chemicals and aerospace industries, of ministers’ hard Brexit approach to leaving the customs union.
There has been a cautious welcome by industry bodies and recognition that retaining customs union membership for a transitional period is needed, something that Unite has also called for.
But both the SMMT, representing the auto industry, and ADS – the trade association for the UK’s aerospace, defence, security and space sectors and the Chemical Industries Association – warned of the considerable risks that are created for business by a two-stage transition period in which Britain goes from EU membership to a temporary arrangement and from that arrangement to a final post-Brexit deal.
Only continued membership of a customs union with the EU and full participation in the single market would avoid additional administration, delays and costs and the undermining of the competitiveness of UK exporters and increased costs of imports, SMMT said.
For Unite, it is important that the principle of a transition period has been accepted. It is welcome that the government has finally woken up to the very real risks customs tariffs and delays pose to UK jobs, particularly in manufacturing.
But the government’s proposals raise more questions than they answer.
Will the proposed new arrangements bring costs to business, and if so how does the government plan to ensure that these are not paid for by workers with their jobs and wages?
Will European Court of Justice jurisdiction, which covers the customs union, remain over the UK during the transition? If not, who will provide arbitration for these trade deals?
Does barrier-free trade really mean removing vital regulations and protections for our members, including safety regulations?
Will Conservative party priorities come before ensuring that we have a customs agreement which provides the same frictionless trade arrangements our industries currently enjoy?
And how, by trying to solve their party political issues, will the government avoid creating another headache in the shape of an immediate hard Irish border, with the inevitable impact on the livelihoods of our members on both sides?
It is very hard not to get the impression that the objective of this government in chaos is to give the appearance of progress when in fact its unclear whether its stance will support or actually threaten UK jobs.