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Analysis

Customs union Brexit plan is staggeringly vague

by Luke Lythgoe | 28.03.2019

While yesterday’s motion for a referendum on any Brexit deal won the most votes, a proposal for a customs union suffered the narrowest defeat. Perhaps MPs felt able to get behind Ken Clarke’s motion because it wasn’t a fully fledged plan.

The motion said the government must “ensure that any Withdrawal Agreement and Political Declaration negotiated with the EU must include, as a minimum, a commitment to negotiate a permanent and comprehensive UK-wide customs union with the EU” (motion J).

The phrase “as a minimum” is open ended. What other add-ons will be needed?

The Northern Ireland backstop is a big problem. A customs union by itself isn’t enough to keep the Irish border open. For that, there also needs to be regulatory alignment between Northern Ireland and the EU in various areas, especially goods and agriculture.

Does Clarke want just Northern Ireland to follow these rules? In that case, it would be partly cut off from Great Britain. There would also be regulatory checks between Great Britain and the EU, so goods wouldn’t flow freely backwards and forwards. That would gum up supply chains for our car makers and the like.

Or does Clarke want the UK to follow EU rules on goods and agriculture? In that case, the whole country would be a rule-taker – or, as Boris Johnson would put it, a “vassal state”.

There’s also a lack of clarity about the term “customs union”. Does Clarke want the UK to be automatically enrolled in any deal that the EU cuts with another country, such as America or China? That could be risky, as we wouldn’t have any vote on those deals. The other 27 countries might decide to let US health care companies compete with the NHS or Chinese steelmakers undercut what’s left of our steel industry. Again, we wouldn’t have a vote.

But if we are not automatically enrolled in the EU’s trade deals, that would also be problematic. We would have a deal like the one Turkey has with the bloc. This gives the EU’s trading partners access to Turkey’s market by the back door but they don’t need to let Turkish exports into their markets. This one-way setup would provide little incentive for other countries to cut trade deals with us.

There are plenty of other questions about Clarke’s proposal. For example, what role would the European Court of Justice play in the arrangement?

What’s more, a customs union alone would do little for our services industries. That’s 80% of the UK economy – and while we have a trade deficit with the EU of £95 billion for goods, we have a surplus of £28 billion in services trade. The EU will only let us have free movement for services if we agree free movement for people. But once you put those into the mix, you are talking about the full single market plus customs union package – a rather different proposal that has its own problems.

Now that Clarke’s motion has become a frontrunner, it needs to be fleshed out and subjected to more scrutiny. Until then, it is just another blind Brexit.

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Edited by Hugo Dixon

5 Responses to “Customs union Brexit plan is staggeringly vague”

  • Yes the Clarke customs union proposition is bizarre. Highly underspecified, seemingly naive and inadequate. So there must be a political story why it got such big support, while Common market 2.0 got so little. What is the story??? An important question since it got so close to a majority. Michael

  • In principle at least: if you’re trying to reach a consensus, you can see whether there’s enough support for something underspecified so as to go on to find out which determinate version of it is favoured. So I sort of understand Ken Clarke’s motion.
    The trouble with Thursday’s indicative votes was that it wasn’t clear what the objective was, nor therefore how the votes on the motions might play into the objective. I hope that on Monday it can be agreed at the outset (i) that the votes are not used simply to test opinion, (ii) that it’s assumed that the Government, having signally failed to have its withdrawal agreement approved in Parliament, will be bound by the upshot of the voting process, (iii) that preferential voting between options [perhaps using Condorcet] may be needed to reach a consensus, and (iv) that what must be settled soon is THE NEXT STEP.
    On the next step, I can see only 3 options: [a] leave without a deal on 12 April, [b] revoke A50, [c] seek a long (welll beyond end of May) extension to A50in order to allow (as the EU could be informed) EITHER a public vote to be held OR a deal softer than TMay’s to be found — and this, with, OR without, a public vote on it. [Note: If Thursday’s indicative votes are to have any point, then perhaps [a], which “lost” by a majority of 240 should already be ruled out. Then it’s Revoke or Extend.]
    I imagine the EU doesn’t think that before 12th April the UK has to tell it precisely which “option” the UK will going for. So that if there were a consensus on [c] , the EU would need to be asked to grant an extension past the Euro-elections in order for a definite conclusion to be reached.
    I’ve likely not got this exactly right. But I hope someone is sorting out a coherent plan which will be explained to MPs, so that Monday’s votes have a definite point, and we have a consensus on what needs to be determined by 12th April.

  • Maybe because the devil is in the detail?
    The vaguer a proposal is, the easier it is to see a way in which you could shape it into something you can support.

  • Of course Clarke’s proposal is not complete in itself but these are indicative votes – not final destinations. In my view it was a major error for people’s vote advocates to abstain on this. They are partly responsible for the ridicule heaped on our parliamentarians for failing to use this unprecedented opportunity to give some positive indication of any way of resolving the impasse. This mistake must not be repeated tomorrow.
    There must be a plan B if a people’s vote is not achievable. Otherwise a catastrophic crash out beckons.

  • To add to the fact that the indicative vote wasn’t on a complete package and if fleshed out would have lost votes on each issue if it had been clarified, there is its silence on sequencing to consider. Some MPs will and some won’t require a second referendum before actually voting for a deal that includes a custom union. If the sequencing ‘detail’ had been clarified one way or other, the votes the Clarke motion garnered would have been further split. Indicative votes on single facets that can’t be voted on for real are indicative of very little.