Brexit crisis: What is a customs union? | Politics News


Britain’s future relationship with the European Union now seems to hinge on the issue of a customs union.

Brexiteers want out of the EU’s customs union but those advocating a soft Brexit think there must be some form of union with the bloc in part to ensure the stability of Ireland and the Irish border.

:: What is a customs union?

A customs union is defined as a group of states that have agreed to eliminate customs duties (import taxes) on trade between themselves, as well as reduce other administrative requirements.

It also sees those states impose a common external tariff on imports from non-members.

:: What is the EU’s customs union?

The EU’s customs union means all trade in goods between member states must be free of customs duties.

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All members must also impose the bloc’s common external tariff on all goods arriving from outside the EU.

This means once imported into the EU, goods can then move around the bloc without any further customs checks.

Trade deals with other countries are negotiated and agreed by Brussels and apply across the bloc.

Theresa May has said the UK should leave the EU’s customs union

:: What other customs unions involve the EU?

The EU itself is a customs union, and the EU is also in unions with Andorra, San Marino, and Turkey.

The arrangement with Turkey does not include agricultural, coal or steel products. Other goods can circulate without paying customs duties and the whole zone applies the same import duties for products from a third country.

:: What does it mean to be a member of a customs union?

Members of the EU have their trade deals with non-EU countries negotiated on their behalf by Brussels.

A customs union removes the need for complex rules to determine whether a good is really from a given partner. It eliminates the “rules of origin” which can be costly and time-consuming.

It limits, but does not prevent, each participant from striking their own free trade agreements with other countries.

But customs unions don’t guarantee “frictionless trade”. Turkey is in a customs union with the EU but there can be delays of more than 24 hours on its land border with the bloc.

Turkish trucks with goods bound for the EU still need to show documents including export declarations, invoices and transport permits for each EU country which the vehicle is going to travel through.

:: Why does this row keep coming up?

In their manifesto, the Conservatives pledged as part of Brexit that Britain would leave both the EU’s single market and customs union.

But there are concerns about how this will impact the border on the island of Ireland.

Last year, Labour shifted its policy on a customs union to say they wanted a new treaty with Brussels that “will do the work” of the UK’s current membership of the EU’s customs union.

Now, MPs are debating various forms of customs unions in the House of Commons for indicative voting about what the House could support.

In March, during the first round of indicative votes, only a maximum of 264 MPs voted to support any form of customs union with the EU. Some forms of a union won as little as 186 votes from the House.

Ken Clarke, father of the House, is one of those bringing options involving customs unions. His motion, tabled alongside Commons veteran Hilary Benn, proposes a permanent and comprehensive UK-wide customs union with the EU. It has been dubbed a “soft Brexit”.

Jeremy Corbyn, the Labour leader, has also proposed staying in the customs union and aligning with the single market – but this version of Brexit also hasn’t drummed up enough support in the House, though senior figures in the EU are interested.

Jeremy Corbyn
Jeremy Corbyn’s version of Brexit would see a permanent customs union with the EU

:: Why are some people opposed to staying in the customs union?

One of the main benefits of Brexit touted by Leave supporters is that it will allow Britain to regain control over its own trade policy and sign deals with countries such as the US, China and Australia.

They say it will also allow the UK to reduce tariffs on imports, such as produce from the developing world, thereby boosting those countries’ economies and meaning cheaper prices for British consumers.

Brexiteers argue re-entering a new customs union with the EU after Brexit will hinder those ambitions.

Mrs May has warned against staying in the customs union, saying on various occasions it would lead the UK being “half in half out” of the EU and warning that staying in the union would fail to honour the referendum result.

:: What do supporters of a customs union think?

Supporters of staying in some form of a customs union say it would avoid tariffs for British businesses, which could push up the cost of goods and services.

The Irish border is a key element of their case. They argue this is the only way of avoiding a hard border between Northern Ireland and the Republic.

They also argue that negotiating new trade deals with the EU would be a long and tortuous process, with all member states having to sign off on the agreements before they can take effect.

Critics also argue that the much-heralded benefits of free trade deals with the likes of the US and Australia would not be felt immediately as it would take years to reach an agreement.

Tory MP Ken Clarke says it would be "unhelpful, irrelevant and irresponsible" for the Conservative party to embark on weeks of a leadership contest.
Tory MP Ken Clarke has tabled a motion with a customs union

:: And what does it all mean for Northern Ireland?

It is argued that retaining a customs union with the EU after Brexit is the only way to avoid a hard border between Northern Ireland and the Republic of Ireland, an EU member state.

This is something the UK government, the Irish government and the EU are all committed to.

The UK government has stated options such as customs exemptions for smaller traders, a “trusted trader” scheme for larger businesses and “technology-based solutions” could all be among answers to the Irish border dilemma.


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