Expert View

Copying Turkey is big step backwards for UK trade

by Denis MacShane | 16.02.2018

Denis MacShane is a former Minister of Europe and was a Labour MP for 18 years.

On the main crossing point for lorries going from Turkey to the EU, a town called Kapikule, drivers can wait up to 30 hours before they can bring their goods into the European market. They have to carry customs carnets – thick documents with pages of details of the goods. They also need entry visas for any EU countries they may pass through. In contrast, freedom of movement rules allow British truckers to go into Europe on a British passport.

It is unlikely, if Brexit Britain rejects the single market, ECJ and freedom of movement, that lorry drivers will be able to cross freely from the UK into EU member states and then across other frontiers – even if it stays in some form of customs union with the EU.

The Institute of Directors (IoD) has just published a report suggesting Britain should opt for a model similar to the EU-Turkey Customs Union. This deal between Turkey and the EU dates back to the 1960s, when it was assumed that Turkey might one day join the Common Market.

Apart from the fact that it doesn’t abolish customs checks, there are major flaws in the EU-Turkey Customs Union agreement. It does not include agricultural and food products. Britain exports half of its lamb production to just one country – Germany. The single biggest food industry export earner from Britain is Scotch. So a Turkey-inspired customs union would be a major blow to key British exports.

In a further twist any free trade agreements the EU negotiates – most recently with Canada – do not extend to Turkey. This means the EU partners in FTAs can export tariff free to Turkey, but can keep tariffs on goods exported from Turkey. And most important of all, any such UK-EU customs union deal modelled on Turkey would not include services – the one sector of the UK economy where Britain runs a significant trade surplus thanks to our strength exporting banking, finance, creative, education,  consultancy, legal and other professional services.

A good deal for our services is only possible thanks to single market membership. The CBI has examined the Turkish-EU Customs Union agreement and told its members that “access to the EU customs union would mean implementing a number of rules… including competition policy and state aid.” Further “it would not be in the UK’s interests to be a silent partner in the EU’s trade policy. The UK needs to be at the table setting the mandate and approving the final agreement.”

In short, the best trade deal is staying in the customs union and the single market and having a seat at the table. The only way to do that is to stay in the EU.

It’s fine that the IoD is trying to mitigate the damage of the Brexit being inflicted on us by the Tories. But it also needs to be honest and tell its members that leaving Europe under all possible variations can only do serious damage to the future prospects of British business.

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Edited by Luke Lythgoe