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The fantasy of an EU ‘customs arrangement’

Bruce Oliver Newsome
April 26, 2019

Over coming weeks, Theresa May's administration will be spinning the same old Withdrawal Agreement as a new 'customs arrangement,' but don't be fooled.

Don't forget that since 2016 Theresa May repeatedly promised that Britain would leave the customs union (and the single market, and EU jurisdiction, and everything else). The Conservative Party's manifesto in 2017 committed the same.

Yet in June 2018, at Chequers, her proposals included to leave the customs union for services (in which Britain has a competitive advantage) but to collect the EU's tariffs on goods and agriculture. The EU responded that Britain could not 'cherry pick' – it had to be either in or out the EU as a whole.

In November 2018, she revealed a Withdrawal Agreement that she falsely marketed as a deal, but is actually just a transition arrangement, in which nothing changes for at least two years  – Britain stays in the customs union (and everything else), until it negotiates something permanent to replace indefinite transition.

By then, hearsay suggested that May was intent on a customs union to replace the Withdrawal Agreement. This should have been easy to negotiate with the Labour Party, when she started bipartisan talks early in April, because Labour's policy was always to stay in the customs union. However, Labour's policy has its own fantasy: that it could be in the customs union but still free to reach trade deals with other parties (this is impossible, because those other parties would be beholden to the customs union).

In theory, Theresa May's Con Party and Jeremy Corbyn's Lab Party should have agreed their overlap by now: stay in the customs union. And they must be betting on the Remainer-majority in Parliament backing them, because the leading option of the alternatives moved by backbenchers in March was a customs union. Kenneth Clarke and Frank Field continue to collude on motioning customs union a third time as the best 'compromise'.

However, each party wants to pretend to deliver Brexit while blaming the other for collective frustration of Brexit to date. Spin is tricky enough when you're pretending your own ugly duckling is a swan, without trying to spin the opposition's ugly duckling as an ugly duckling.

So now Theresa May's administration is spinning a fake alternative that it calls 'customs arrangement'. This was the same term that she span in June 2018 at Chequers, when the ugly duckling was (remember?) pretending to be out, but collecting the EU's tariffs on goods and agricultural products, as if we were in.

What does May's administration mean by 'customs arrangement' in April 2019 as opposed to June 2018? Characteristically, it leaves everything too vague to know. Knowing that nobody trusts May to tell the time of day, she sent her few remaining reliable spin-merchants to speak for her. On Wednesday, her Chancellor (Philip Hammond) attempted to instil urgency in us to support her Withdrawal Agreement, by warning that if it isn't passed this summer then government spending will be cut. That's Project Fear Version number everybody-has-lost-count.

Meanwhile, May sent her de facto deputy (David Liddington) to tell Parliament: 'I hope it will be possible to bring members from all sides of the House together in support of a customs arrangement as part of a wider approach to our future relationship with the European Union.' The Labour Party responded that the government should just agree a customs union.

Whichever party you pick, its fake Brexit would lie somewhere between full customs union spun with the pretence of independence (the Labour promise) or opting services out of the customs union but keeping goods and agriculture in the customs union (the Chequers proposal), which is impractical, since goods and services are often bundled.

The spin doesn't end there. If you're in the customs union, you are entailed to parts of the single market too (in order for you to avoid customs on a particular good, it must comply with the relevant regulations of the single market – which holds like-goods to the same standards).

Moreover, if you're entailed to either the customs union or the single market, you're entailed to be judged by EU courts. And you're obliged to pay membership fees for the parts you stay in (the customs union and single market are the main parts, and thus entail the most expensive fees).

Additionally, if you're committed to the customs union and/or single market, you're committed to the free movement of goods under EU rules. Thence border control becomes impractical; thence the promise to control the free movement of people becomes impractical.

Let me summarize, to leave no doubt of the enormity of the lies this government is hiding behind a 'customs arrangement'. In fact, staying in the customs union means staying in the single market, EU jurisdiction, fee-paying obligations, free movement of goods, and thence free movement of people. Yet Britain would have no say in any of those things – because it wouldn't be a member of the EU.

You might be thinking: 'I'm so tired and frustrated with three years of confusing spin and procrastination, why don't we just accept these costs in return for friction-less trade?' Because you wouldn't get friction-less trade. If you're in the customs union alone (like Turkey) you would get all the costs of a customs union, but avoid only checks on rules of origin, while still being expected to check movement certificates.

A customs union would be the worst of all worlds: no influence, no trading sovereignty, still paying fees to the EU, still taking rules and regulations from the EU, still subject to EU courts, still not in control of our borders.

Bruce Oliver Newsome, Ph.D. is a lecturer in International Relations at the University of San Diego
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