Labour leader Jeremy Corbyn wants EU customs union after Brexit
By Hull Daily Mail | Posted: 27 Feb 2018
Labour leader Jeremy Corbyn has today outlined his plans for keeping the UK in a customs union with the European Union.
The plan would see the UK continue to sign-up to the trade taxes agreed by all 27 European Union members (and some non-members, including Turkey) after Brexit.
The benefit of being a customs union member is that UK businesses would be able to continue to trade with the EU – the largest trading bloc in the world – without having to pay any charges (and vice-versa). The drawback is it would make it much harder, if not impossible, for the UK to conduct its own trade deals after the divorce from Brussels.
What did Mr Corbyn say?
Speaking in Coventry, a city which voted by 56 per cent to Leave, Mr Corbyn said: “We have long argued that a customs union is a viable option for the final deal.
“Labour would seek to negotiate a new comprehensive UK-EU customs union to ensure that there are no tariffs with Europe and to help avoid any need whatsoever for a hard border in Northern Ireland.”
How does a customs union work?
Labour leader Jeremy Corbyn has proposed staying in a customs union with the EU (Image: Gareth Fuller/PA Wire)
The countries in the customs union club together and agree to apply the same taxes to goods being sold into those countries from outside the union.
Once goods have cleared customs in one country, they can be shipped to others in the union without further charges being imposed.
Being part of a customs union would mean no extra charges on UK goods being sold into the EU – the country’s largest export market. Grimsby’s seafood processing industry has been lobbying for a post-Brexit EU trading relationship which is free from charges and customs checks.
Are there any issues with being in a customs union?
Labour face two challenges with their position – the first being that the EU bans members of its customs union from negotiating their own international trade deals.
If the rules were the same in "a" customs union between the UK and EU, then ministers would not be able to negotiate free trade deals with the likes of the USA or China as it could not change the import or export tariffs placed on those “third” countries outside the bloc.
But Mr Corbyn said he would only sign-up to a customs union deal if the UK has “a say” in negotiating future trade deals.
“We are also clear that the option of a new UK customs union with the EU would need to ensure the UK has a say in future trade deals,” he said.
There is due to be a major vote in Parliament on remaining in a customs union with the EU
“A new customs arrangement would depend on Britain being able to negotiate agreement of new trade deals in our national interest.”
The second issue is that Labour said in their election manifesto that they want to protect struggling UK industries. But state aid and blocking cheap imports, such as steel, through higher taxes is against customs unions rules.
The party said it would negotiate “exemptions” from EU rules to bring in the defensive measures.
Does being part of a customs union mean accepting EU migrants?
No – a customs union deals with tariffs (export and import taxes). It is the single market which allows free movement of workers and goods.
Mr Corbyn said Labour would “negotiate a new and strong relationship with the single market” in order to protect workers’ rights but stopped short of signing-up Labour to free movement.
How have critics reacted to the speech?
David Davis, Brexit Secretary and Haltemprice and Howden MP
East Yorkshire MP David Davis slammed the Labour announcement, saying it would prevent the UK from realising the benefits of Brexit. The Tory Government proposes leaving both the customs union and single market.
The Brexit Secretary and Haltemprice and Howden MP said: “By forcing the UK to maintain a single external tariff and common commercial policy, both of which are set in Brussels, a customs union would prevent us from signing economy-boosting, job-creating free trade deals with other countries around the world.”
Why is Mr Corbyn saying this now?
Mr Corbyn has been shy about discussing Brexit, mainly because a large chunk of Labour voters – including those in Hull and North East Lincolnshire– are leave supporters. But with a major vote on the customs union due soon in Parliament, Mr Corbyn’s announcement has put the Government on notice that it could be facing an embarrassing loss.
Labour is now likely to vote for a Tory amendment to the Taxations (Cross-Border Trade) Bill – formerly known as the Customs Bill – which would keep the UK in a customs union after Brexit.
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