LONDON — British lawmakers long at loggerheads over the path to withdrawing from the European Union actually came close to agreeing on something Monday: a solution known as a “customs union.”
What is it?
Simply put, it would entail Britain’s agreeing to stay permanently in a customs union with the bloc — a “soft Brexit,” of sorts.
What is a customs union?
The customs union being proposed in Parliament by a former Conservative chancellor, Ken Clarke, would keep the United Kingdom in the same tariff system as the European Union countries.
A customs union would help businesses that send goods back and forth to the Continent, so it would be of most interest to Britain’s manufacturers, particularly the automobile industry. But some smaller businesses might also benefit.
And it might also ease complication of the much-hated Irish backstop plan, which is intended to eliminate the need for hard border checks between Northern Ireland and the south.
Sounds good. What’s the hitch?
While a customs union would allow goods to flow more easily, it would not allow for frictionless trade.
Yes, the agreement would keep the tariffs Britain pays on goods that cross the border equal to those that countries in the European Union pay.
But it is more complicated than that. The goods being traded will still need to meet the same product standards that apply throughout the bloc, to keep the playing field level.
What might that mean for Britain? Just take a look at Turkey.
Turkey is a member of a customs union with the European Union, but it is not a member of the bloc itself. So trucks on its borders are often held up for hours as guards check for permits and make sure the products being transported are in compliance with regulations set in Brussels.
And a customs union would not cover trade in services, like legal counsel and information technology, which are by far the largest sector of the British economy.
But the biggest objection from Brexit backers to a customs union is that countries that are in one are prohibited from making their own trade deals. And that, they argue vociferously, undermines the whole point of leaving the bloc.
Chris Grayling, the transport secretary, warned on Monday that a customs union would result in the government of Lithuania having “more power” over Britain’s trading relationship than British ministers.
That might explain why only 35 Conservatives voted for the customs union proposal last week.
Would it at least solve the Irish border problem?
Well, no, for the same reason that trucks pile up on the border between Turkey and the European Union. Even though tariffs would be equalized, there would remain the need to check that products, particularly food, comply with the bloc’s standards.
That problem could be avoided if Northern Ireland remained aligned with single-market rules on food and health standards. But that is alarming to the Brexiteers, who are adamantly opposed to any agreement that would make Northern Ireland subject to different rules than the rest of the United Kingdom.
In an interview with The Daily Telegraph, Mr. Grayling said it was a “myth” that a customs union would solve the Irish border issue.
“It is not going to come without strings attached,” he said. “The idea that we just get a customs arrangement without having to sign up to a raft of single-market legislation is extremely unlikely.”
Are there any alternatives?
Sure. Plenty.
But there is no guarantee any would be more palatable to a majority of lawmakers.
The one most mentioned is “Common Market 2.0,” put forward by a cross-party group of Tory and Labour lawmakers. It would require Britain to remain a part of the bloc’s single market, as well as in a customs union.
Often referred to as a “Norway-style soft Brexit,” it would mean accepting single-market rules, but not require direct involvement in the quest for closer political union and agricultural policies.
It would, however, require Britain to accept freedom of movement between member states, perhaps the one thing above all that Mrs. May vowed to end in the Brexit process.
In the last round of votes, 189 members of Parliament voted for the plan, while 283 voted against it. On Monday night, it was defeated more narrowly after the opposition Labour Party said it would whip its lawmakers to vote for the amendment.
What’s likely to happen?
Your guess is as good as anyone’s.
Getting out of the customs union was one of the red lines set by Mrs. May, who has said that Britain must have “new opportunities to trade with the rest the world.”
Agreeing to any “softening” in her Brexit stance is politically perilous. It may incite mass resignations by pro-Brexit lawmakers in her cabinet, who have called the customs union and other similar proposals a betrayal of the 2016 referendum result.
Source : Nytimes
