Theresa May’s government has handled the Brexit negotiations with the EU so shambolically that even the slightest sign of common sense feels like a breakthrough. Thus it is some relief that the government’s paper on future customs arrangements, published on Tuesday, accepts the UK will need a transitional customs union to avoid a catastrophic shock when it leaves the union in March 2019.
There, unfortunately, the good news largely ends. The government still seems to have no clear idea of what will come after a transition, bar some wishful thinking. David Davis, the secretary of state for leaving the EU, remarked that the lack of detail - which contrasts sharply with the extensive position papers published by Brussels - constituted “constructive ambiguity”. Given the obvious divisions between ministers about where they want Britain to end up, the government’s approach looks a lot more like destructive ambivalence.
The basic idea of a customs union is simple. It involves a common external tariff against imports from all other countries in the world, enabling goods to circulate freely within the union without one country being used as a low-tariff back door. For the UK, the reality will be a little more complex. Since its membership of the EU customs union will expire in March 2019, it will need a new customs union agreement with the bloc to retain its current position during a transition period.
Not only that, but if the UK is to maintain true frictionless trade within the EU, it will also need arrangements to continue the regulation that underpins the single market. Customs unions refer only to tariffs, but for exporters in a modern economy, inspections for product standards are frequently a bigger burden. Turkey, for example, has a partial customs union with the EU, but that does not stop Turkish goods being subject to sometimes onerous checks at the EU border.
Still, such things are manageable. Beyond the transition period, however, the government’s plans start to leave the realm of the practical and enter the world where cakes are simultaneously owned and eaten. They vaguely envisage either a streamlined customs arrangement in which technology is used to eliminate administrative burdens, or a new customs partnership somehow capable of tracking goods through international supply chains with sufficient precision that Britain can in effect operate the EU customs border with third countries itself, eliminating the need for a UK-EU border.
Since nothing as sophisticated as this currently exists, one might question the viability of creating it from scratch within a few years. As the European Commission said on Tuesday, only membership of the customs union and single market will deliver frictionless trade.
That the UK government is finally starting to make some proposals is positive. But they still lack detail and practicability. The customs paper is just 14 pages long and is discursive rather than decisive. In any case, the UK has so far shown itself incapable of properly addressing the first issues that need to be resolved - Britain’s financial obligations to the EU, and the post-Brexit rights of EU citizens in the UK and vice versa.
While a glimmer of reality is welcome, the British government has shown itself to be too much at the mercy of internal strife between its ministers to produce a coherent and detailed plan for Brexit. The commitment to minimise customs disruption during an interim period is sensible, but this does not add up to a substantive plan for the future.
