Why Corbyn’s Customs Union with the EU is a bad idea

On Monday I detailed the main issue I have with Corbyn’s Customs Union plan.

My problem was the plan was based on a delusion that the EU will allow the UK to cherrypick the parts of being in the EU we find desirable.

I also had a niggling thought that, if having a Customs Union with the EU was such a good idea, then why does only one other country have that arrangement. I mean, the EFTA countries like Norway and Switzerland, who we normally use as examples of a soft-Brexit, don’t have such a deal.

The only country that does, Turkey, probably does so through political expedience and not because it is the ideal situation for them. They want to become an EU member and a Customs Union is a stepping stone.

Luckily, there was a great article in the Guardian this week by Vernon Bogdanor who is a professor of government at King’s College London. He spells out the technical issues with being in a Customs Union with the EU but not being in the EU. It explains why it would probably be a bad idea and why it is not a very common occurrence.

Here are the main points that he makes in the article.

  • If you are in a Customs Union, there has to be a common external tariff. Which means that goods coming into the Customs Union pay a single tariff and can then move freely within the union. Which means that only the EU can negotiate trade deals with countries outwith the EU that involved lowering of tariffs. Which would prevent the UK doing so unilaterally. Which defeats the whole purpose of Brexit. The bulk of trade deals would be negotiated on behalf of the UK and we would have little say in the process.
  • There is one exception. Any trade deal the EU negotiated outwith the EU would open up UK markets to the third country but would not allow the UK to get the same access to markets in the third country. This is because that access would only apply to members of the EU. Therefore, the UK would need to negotiate this access but there would be little incentive for the other country to do so. This is because they would already have a good deal for accessing our markets so we would not be a priority for them.
  • There cannot be different sets of standards and regulations between different members of a Customs Union. Therefore, the UK would essentially have to follow European Court of Justice rulings. So, the UK would be subject to many EU laws but without any power to decide on them. A far less democratic situation to being a full member of the EU.
  • There is only one non-EU country that has a Customs Union with the EU and it doesn’t work very well. There are often 10-mile queues at the border between Turkey and Bulgaria. Two miles is considered a short queue. That wouldn’t be a good situation for businesses in the UK and won’t help with the Northern Ireland situation.

Now, defenders of Corbyn might say that Corbyn wants a bespoke deal.

One where the UK has a say in trade deals and has selective Single Market access with an ability to influence policy. Well, that is what he is saying but that then goes back to our previous argument of Corbyn trying to cherrypick a solution that the EU won’t agree to. Either way, his plan seems more wishful thinking than a realistic solution.

Professor Bogdanor concludes his article by saying, the only realistic choice is between a hard Brexit or no Brexit at all.

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