Customs Union confusion – yet again

Jeremy Corbyn gave a speech about Brexit in Coventry today. He was 100% correct in his observations about the Government’s progress (or lack of it) :- “They can’t agree amongst themselves about what their priorities are or what future they want for Britain after Brexit….. The truth is we really don’t know much more about where they’re actually heading in these talks.

On the other hand, he has fallen into the trap into which a number of other politicians have fallen – he fails to understand what a customs union actually is.  He said, “During the transition period, Labour would seek to remain in a customs union with the EU and within the single market. That means we would abide by the existing rules of both.”

Why? if he wants us to stay within the single market, remaining in the customs union is superfluous. His reasoning is that “when 44 per cent of our exports are to EU countries and 50 per cent of our imports come from the EU, then it is in both our interests for that trade to remain tariff-free.”  That is fair enough, but Norway, which is not in the Customs union, manages virtual tariff-free trade with the EU. EFTA and EEA membership is sufficient.

Corbyn’s confusion is laid bare when he says that “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 for a hard border in Northern Ireland. ” How can the EU be part of a customs union with the UK while being a customs union in and of itself?

He then went on to say “But 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. A new customs arrangement would depend on Britain being able to negotiate agreement of new trade deals in our national interest.” If the UK was able to make its own trading arrangements, then it could not be in a customs union with the EU. The whole point of a customs union is that it includes a common external tariff. If we negotiated a trade deal with, for example, Australia while the EU did not have one, what would be the point if we were forced to charge the same tariff as the EU on Australian goods?

Perhaps Mr Corbyn and other advocates of either remaining in the EU’s Customs Union or somehow creating a new one with the EU should see what goes on at Kapikule on the border between EU Bulgaria and non-EU Turkey. Turkey is linked to the EU’s customs union, so you would expect reasonably seamless movement across the border. According  to this report, however, this is far from being the case, with delays for lorries sometimes lasting for several days.  A customs union may be a good idea for micro-states like Monaco or San Marino, but not for a country like the UK, where each year, over 2 million lorries pass through the port of Dover alone.

What we desperately need is a customs clearance agreement with the EU, or else we could face “Operation stack on steroids” on the M20 after Brexit Day.  Unfortunately, if so many of our senior politicians cannot distinguish between customs clearance and a customs union, there are good reasons to fear that Kent may become gridlocked with lorries in a mere 396 days’ time.  Yes, it really is getting that close and on the basis of today’s speech, it seems that the leader of Her Majesty’s Opposition has no more idea of how to save us from such a disaster by delivering a sensible, workable Brexit than our Government.

Photo by Peanut99

Brexit hangs over the port of Dover

This article is copied by kind permission of the author, Mary Kenny. It appeared in The Oldie, edition of March 2018

Without an ingenious deal, the place could be clogged up with thousands of becalmed freight lorries.

As an Irish citizen, I abstained from the Brexit vote, although I sympathise with the argument that a country is entitled to control its own borders and make its own laws. But, living just eight miles from Dover, I am beginning to grasp that entering and leaving Britain’s major port post-Brexit could be a huge headache unless some very clever deal is accomplished.

A well-informed Doverian, Mick Tedder, who has forty years of experience of working at the port, and is a member of the Port and Community Forum, is very “pessimistic” about Dover’s immediate future. The port of Dover can see more than 10,000 freight vehicles pass through daily; he worked there before 1973 when there was only a fraction of such traffic and a truck might have to park up for two or three hours while the paperwork was completed. Mr Tedder, who voted Brexit (as did most of the Dover referendum voters) predicts that if border controls are introduced, there will be “Armageddon” in the garden of England. He envisages the need for a huge parking holding area for vehicles awaiting processing, and congestion spiralling out in all directions.

Supposing everything has to be stopped and checked too, at the Channel Tunnel? Imagine the traffic jams and delays.

The local MP, Charlie Elphicke, seems to place his confidence in electronic scanning, as occurs between Canada and the US, but local lobby groups, such as EU Thinking Deal + Dover are sceptical that this can be done at a huge maritime port such as Dover, which handles 17 per cent of Britain’s imports. There are other issues too, such as the transport of animals – animals can only be confined in lorries for a certain amount of time, and long waiting periods would be disastrous.

The authorities at the Port of Dover have little to say about the situation because it seems still so hazy. Talk about Continent cut off by fog!

Mr Tedder, a Brexit voter, is now keen on a soft Brexit to allow Britain’s major port to function effectively, although he does add, “You’re not just dealing with the EU. You’re dealing with the French!” (French industrial stoppages have been known to cause mayhem.)

On the plus side, there’s a boat in Dover Museum dating from the Bronze Age, witness the fact that there’s been trading across the narrow twenty mile Channel since the time of the Pyramids. Though not at the rate of 10,000 trucks per day.

Photo by ketmonkey

Some helpful insights from the Freight Transport Association

The really hard tasks will begin soon. Once Article 50 is triggered, the UK government will then have to negotiate a Brexit deal that will enable our trade with both the EU and the rest of the world to continue.

As an example of how complex this might be, the Freight Transport Association (FTA) has published a submission it made to Parliament, expressing a number of concerns facing the industry.  Like many organisations involved in trade with the EU, the FTA wishes to ensure that we do not face huge disruption as a result of Mrs May’s decision that we will leave the Single Market.

The piece is worth reading in full, but a few points are worth highlighting:-

  1. There will almost certainly need to be a transitional trading arrangement between the UK and the EU. Negotiating a full trade deal may be very tight, if not unachievable, within the two year timescale of Article 50.
  2. No deal will give us as unfettered access to the Single Market as EEA membership would have done. There will inevitably have to be some trade-offs.
  3. Increased Border controls will be very time-consuming. Falling back on the WTO option would be particularly bad in this respect. The port of Dover would suffer more than anywhere else as freight movements are predicted to rise to between 14,000 and 16,000 per day in the next decade.
  4. Although tariffs are falling worldwide, some sectors of the economy would suffer if tariff-free access to the EU were lost. Tariffs of 10% or more could be imposed on motor vehicles, for instance.
  5. The biggest worry is that the EU may not want to tackle trade issues until after Brexit.  Michel Barnier, the European Commission’s Chief negotiator, made a statement suggesting that the two-year period following the formal triggering of article 50 would only be devoted to withdrawal arrangements and that issues related to the post-Brexit trade relationship with the EU would only be dealt with post-Brexit.  While this is only one person’s opinion and that other voices within the EU are keen to avoid such a disastrous scenario, it shows that the UK’s negotiators will be facing some quite difficult individuals on the other side of the table.

No, Brexit is not going to be easy. We can but hope that the Government has been preparing for these eventualities and knows what it wants before the negotiations begin.