On Thursday in the House of Commons a discussion took place on the theme of the Customs Union under the heading of Free Trade Agreements. Three Conservative MPs bizarrely asked an identical question and one of these was the MP for Crawley, Henry Smith. The Minister who responded was Suella Braverman The Parliamentary Under-Secretary of State for Exiting the European Union. The question from the three MPs was: “What assessment he has made of the potential effect of the UK remaining in the customs union on its ability to negotiate new free trade agreements throughout the world”
SB responded with “Only by leaving the customs union and establishing a new and ambitious customs arrangement with the EU will we be able to forge new trade relationships with our partners around the world. If the UK were to remain in the customs union, we would be unable to implement our own trade deals or to set our own tariffs.“
So even one of the most Eurosceptical MPs believes we need to strike a good deal with the EU which seems to suggest that some of her criticisms and attacks on the EU in other settings are likely to counter productive. Along with Henry another of the two MPs was Robert Courts from David Camerons old constituency whose follow up question was “Any policy whereby Britain leaves the European Union but remains in the customs union would mean surrendering our trade policy to a third party, and would mean that we were required to open our markets to other countries without guaranteed reciprocal access to theirs. Does my hon. Friend agree that no independent, self-respecting nation could tolerate such a position?”
SB: “I agree with my hon. Friend. A customs union creates an asymmetrical relationship. Turkey is an example of a country in a customs union with the EU but not in the customs union with the EU. The effect of that is that if the EU signs a free trade agreement with a third country—let us say, the US or Canada—goods from the US or Canada can enter Turkey tariff-free, but Turkish goods still face a tariff barrier in Canada or America, which puts Turkish businesses and exporters at a significant disadvantage. With free trade as the big prize for Brexit, Labour’s support for a customs union makes no sense at all”
So what Robert and Suella appear to be suggesting is that a customs union that is not the customs union will serve us badly, but what is needed is “a new and ambitious customs arrangement with the EU” which of course need not be called a customs union and indeed it was it would be asymmetrical, but because the EU is likely to strike deals with Canada and the USA would would be better placed trying to achieve this ourselves.
The follow up question from Henry was just as strange in the context of the wider picture and the way their discussion is taking place: “When I have met elected representatives from places as far apart as Wellington and Washington, they have been very keen to do trade deals with the United Kingdom post-Brexit. Will the Minister confirm that that would not be possible if we remained part of the customs union?” which was answered by SB “Yes. Remaining in a customs union or the customs union with the EU would not be compatible with having a meaningful, independent trade policy. It would mean that we would have less control than we have now over our trading relationships with other countries. Neither leave nor remain voters would want that”
The reality is that the EU is as Suella suggested likely to strike a trade deal with the USA and if Henry bothered to check out this part of the EU website he would see that back in 2017 “the EU and New Zealand entered into a partnership agreement which contains a number of economic and trade cooperation rules” and “On 22 May 2018, the Council of the European Union adopted the decision authorising the opening of negotiations for a Free Trade Agreement between the EU and New Zealand” so in fact a free trade deal with Wellington is already underway.
Now of course it may be that we could achieve a different outcome from the EU with New Zealand and the USA, but it is just as possible for it to be worse than better. After all the same sort of people who are negotiating our exit with the EU will be the ones organising our free trade deals with other nations. Add to this how much smaller our economy is than the EU. All of the above seems to suggest that rather than “a new and ambitious customs arrangement with the EU” that what we need is to stay inside the customs union that already exists and benefit from it as we have been doing since we helped to create it.