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The United Kingdom starts to consider whether it has joined the customs union after Brexit

DATE: Apr 18th, 2018
According to reports in the Financial Times, British Prime Minister Mehmet Etienne personally assessed whether the United Kingdom could reach an agreement with the European Union for a customs union. If left in the customs union, the ability of the United Kingdom to separate itself in the future will be greatly limited.

Senior British officials believe that this move will reduce the trade losses to the EU after Brexit, and that it will be able to reduce complicated new customs procedures and help solve the Irish border issue. A British official stated that if the United Kingdom can maintain trade in the Customs Union and retain certain independence (especially the service industry), Britain should consider adopting this approach.

British Finance Minister Philip Hammond and Commercial Minister Greg Clark both supported the maintenance of close customs relations with the EU after Brexit. However, Trade Minister Liam Fox of the European Union does not support staying in the customs union. He believes that if Britain stays in the customs union, it will need to rely on the terms of trade negotiated by the EU and comply with its trade policy. This conflicts with the development of an independent trade policy by Britain.

The United Kingdom needs to leave the customs union to seize the opportunity to trade with fast-growing markets, and one of Brexit’s exits in Europe is that it is impossible to continue to use the single market tax rate because it wants to take back the main control. However, Mey did not rule out the possibility of remaining in the customs union, saying that the goal after Brexit is to ensure that the United Kingdom can reach the best agreement with China and other countries in the world. If Britain remains in the Customs Union after Brexit, it will continue to seek agreements with non-EU countries because it cannot continue to enjoy trade agreements between the EU and the Third Nations. However, countries that have signed agreements with the European Union can already sell goods to the UK market through customs unions, so the UK’s ability to negotiate in this area will be limited.

The United Kingdom can still negotiate independent agreements in the services sector (accounting for about 80% of the British economy), but the practice of signing trade agreements only for service industries is relatively new and may deviate from the global economy. A spokesperson for the British government stated that Britain hopes to achieve the smoothest possible trade arrangements, but it also needs freedom to sign trade agreements with the world.