UK seeks new Customs union after Brexit

Lorries travel along an exit ramp at the Port of Dover. Britain says its membership of the EU Customs Union, which currently allows for the tariff-free movement of goods, will end along with its membership of the single market when it leaves the bloc
Lorries travel along an exit ramp at the Port of Dover. Britain says its membership of the EU Customs Union, which currently allows for the tariff-free movement of goods, will end along with its membership of the single market when it leaves the bloc in March 2019.PHOTO: BLOOMBERG

Britain will propose interim arrangement with EU and right to ink other trade deals

LONDON • Britain will propose setting up an interim Customs agreement with the European Union (EU) after Brexit to allow the freest possible trade of goods.

But it will also seek the right to negotiate other trade deals, a possible sticking point in the current "divorce" talks.

Brexit minister David Davis told BBC radio yesterday that the transition period could last "something like two years" and would have to be over by the time of the next general election, which is set for 2022.

The proposal was welcomed by the Confederation of British Industry, Britain's big business lobby.

But the European Parliament's Brexit coordinator, Mr Guy Verhofstadt, dismissed it as "fantasy".

"To be in and out of the Customs Union & 'invisible borders' is a fantasy. First need to secure citizens rights & a financial settlement," Mr Verhofstadt said on Twitter.

And opposition Labour lawmaker Chris Leslie, from the campaign group Open Britain, said the proposal represented "wishful thinking of the highest order".

The government said it would seek to agree to a "time-limited period of implementation" after leaving the EU to provide certainty for businesses and allow new Customs arrangements to be set up.

Britain says its membership of the EU Customs Union, which currently allows for the tariff-free movement of goods, will end along with its membership of the single market when it leaves the bloc in March 2019.

After that, "one possible approach would be a temporary Customs union between the UK and the EU," the Brexit ministry said in a statement, ahead of the publication of the full paper.

The Department for Exiting the EU said Britain wanted to be able to sign free trade agreements with third countries during this period, although these would only be implemented at the end of it.

The European Commission, the EU's executive arm, said it would "take note" of the proposals but would not negotiate on the future relationship with Britain before other issues are resolved.

Experts have warned that it will be extremely difficult to negotiate a new EU-UK free trade agreement before Britain leaves the bloc - particularly as Brussels has so far refused even to start trade talks.

It says there must be broad agreement first on three key issues - Britain's financial settlement, the issue of expatriate rights, and the question of the border between British-controlled Northern Ireland and Ireland.

Britain will publish its proposals on the Northern Ireland border issue later today, ahead of the third round of Brexit negotiations in Brussels at the end of the month.

REUTERS, AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on August 16, 2017, with the headline 'UK seeks new Customs union after Brexit'. Print Edition | Subscribe