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Three weeks from the EU summit at which the EU 27 expects the UK to table answers to the two key Brexit questions: what kind of customs relationship it wants and how it plans to solve the Irish border problem. Nothing suggests the government will be able to do so.
The Brexit secretary, David Davis, sort of had a bash, reportedly mooting an entirely unworkable post-Brexit customs fudge whereby Northern Ireland would have both EU and UK status plus a 10-mile “buffer zone” between it and the Republic to avoid border checks, but No 10 was quick to knock it down.
Officially, the cabinet is still “refining” two potential customs solutions: the so-called customs partnership, under which the UK would collect import duties on behalf of the EU, and its more technology-focused “max-fac” alternative – both of which the EU has already rejected as unworkable.
Q&A What is a customs union and why does it matter?
A customs union is an agreement by a group of countries, such as the EU, to all apply the same tariffs on imported goods from the rest of the world and, typically, eliminate them entirely for trade within the group. By doing this, they can help avoid the need for costly and time-consuming customs checks during trade between members of the union. Asian shipping containers arriving at Felixstowe or Rotterdam, for example, need only pass through customs once before their contents head to markets all over Europe. Lorries passing between Dover and Calais avoid delay entirely.
Customs are not the only checks that count – imports are also scrutinised for conformity with trading standards regulations and security and immigration purposes – but they do play an important role in determining how much friction there is at the border. A strict customs regime at Dover or between Northern Ireland and the Republic of Ireland would lead to delays that will be costly for business and disruptive for travellers. Just-in-time supply chains in industries such as car making could suffer. An Irish peace process built around the principle of entirely unfettered travel between north and south could be jeopardised.
Sadly, Brussels is also deeply suspicious of Theresa May’s “backstop” plan to leave the whole of the UK in a customs union with the EU until the Irish border issue is solved. So conversations over dinner in Brussels on 28 June are set to be lively, and unproductive. Increasingly, it looks like crunch time will be October’s EU summit.
Meanwhile, top European industrialists warned the prime minister that time was fast running out if she wanted to ensure post-Brexit trade was as frictionless as in a customs union. The influential Open Europe thinktank said the UK should accept continued EU regulations in goods in return for single market access:
There is no strong business case for immediate significant divergence from the EU’s regulatory regime [in goods] ... The approach on services should be about managing divergence.
Further raising the pressure on the beleaguered May, ex-cabinet ministers Amber Rudd, Justine Greening and Damian Green told her she must ignore extremist minorities on Brexit and listen instead to moderate voices in her party arguing for a “pragmatic approach” and “sensible” deal.
Still, if you believe the government and Brexiters (and why wouldn’t you?) at least we won’t risk Armageddon if we leave without a deal. A leaked Whitehall report predicting the port of Dover would collapse and food, fuel and medicine run out within days was dismissed as “false”, “hysterical” and “fear on speed”.
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Faced with that leaked Whitehall report on the cataclysmic consequences of a no-deal Brexit, the Guardian says it is high time for realism - on both sides:
The costs of Brexit will largely be borne by the British but some will fall on the EU27 as well. It is in no one’s interests to have Britain decline into a sullen and impoverished island locked for decades into a bitter and interminable argument with itself over who was to blame for its condition, like a divorced man drinking alone in a bedsit. Who would want that for a neighbour? The first requirement is realism, on both sides. Britain’s stances towards Brexit at the moment are based on self-delusion. But at the same time, the EU cannot expect that a future British government will see the error of its ways and come back begging for forgiveness and a fresh start. The worse the consequences of Brexit become, the more the leavers will blame them on unreasonable foreigners. Nor will this kind of nationalist rage against Brussels be confined to the UK.
In the Independent, Andrew Grice argues that Donald Trump’s tariff war has strengthened the case for a customs union with the EU:
The Brexiteers will argue that it would be easier for the UK to reach agreement with the US than to wait for a EU-US deal with 28 varying EU interests to accommodate. Eurosceptics insist that allowing the EU to continue to negotiate the UK’s trade agreements after Brexit would be even worse than EU membership, since we would have no influence over them. But Brussels has promised Britain consultation on future trade deals the EU would negotiate on the UK’s behalf if it stayed in a customs union. That looks increasingly like the right course. The Foreign Office’s mantra is to “hug the US close”. Trump’s actions prove that it’s time to rewrite it, and accept that to “hug the EU close” after Brexit is now in the national interest.
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Germany’s Brexit czar is not optimistic for the June summit, and reckons October is going to be an almighty scramble: