UK Parliament Debates Future of Customs Union Involvement

3 May 2018

The UK’s future involvement with the EU customs union has sparked renewed debate in the country’s legislature, with parliamentarians taking a series of votes in recent weeks on the subject even as Brexit negotiations continue.

Following the votes in UK Parliament, a Brexit cabinet meeting set for Wednesday 2 May was due to discuss the customs union issue further, though no decisions were expected to emerge at the time of this writing. 

The question of the UK’s customs union involvement has drawn particular scrutiny given its implications for Ireland, an EU member state, and Northern Ireland, which is part of the United Kingdom. Both the EU and UK have pledged not to reinstate a hard border on the Irish isle, and thus avoid jeopardising the Good Friday peace accords. 

In March, UK Prime Minister Theresa May outlined in a speech two suggested alternatives to address the customs union issue. One involves the creation of a new UK-EU “customs partnership,” where the UK would apply the EU’s same tariffs and rules of origin for those goods arriving in the UK and intended for the European Union. Goods intended solely for the UK market, however, would face UK tariffs and any other UK-specific requirements. 

The second option for the customs union relies on the implementation of various technological tools and measures that would aim to ensure simple cross-border movement of goods, with the entry and exit declarations waived between the UK and the 27 remaining EU member states. Other methods under this option include recognising each other’s trusted trader schemes and cooperating on security risks. 

UK debates intensify 

In recent weeks, UK parliamentarians have engaged in intense discussions over the customs partnership proposal. 

The UK’s Exiting the European Union Committee indicated their concerns in a report on the government’s customs plans, especially in regard to Ireland, with committee chair Hilary Benn calling for “credible, detailed proposals as to how it can operate a 'frictionless border' between Northern Ireland and the Republic of Ireland” while exiting the single market and customs union.  “We know of no international border, other than the internal borders of the EU, that operates without checks and physical infrastructure. This is deeply concerning,” Benn said

Following debate on 18 April, the House of Lords voted to back an amendment to the EU (Withdrawal) Bill to prevent the European Communities Act from being repealed until May’s government has explained to parliament the steps it has taken to negotiate the UK’s participation in the EU’s customs union. 

On 26 April, the House of Commons held a debate on the customs union issue in their Liaison Committee, which saw members review concerns such as what May’s customs union proposals would mean for the UK’s ability to negotiate future trade accords with interested third parties. 

At the end of the meeting, that chamber resolved to call on the government to “include as an objective in negotiations on the future relationship between the UK and the EU the establishment of an effective customs union between the two territories.”

The UK’s legislation for withdrawing from the EU will need to undergo several additional stages in the UK parliamentary process before becoming law. 

Meanwhile, during a speech in Ireland earlier this week, the EU’s chief Brexit negotiator, Michel Barnier, described the bloc’s own thoughts on the future customs relationship with the UK, including for “maintaining these cross-border exchanges on the island of Ireland after Brexit.” 

He defended, for example, the legal backstop included in the Brexit transition deal announced earlier this year, in which the UK and EU agreed that Northern Ireland would abide by the single market and customs union if both sides fail to find an alternative. 

He also flagged, however, that Ireland’s participation in the single market meant that “goods entering Northern Ireland must comply with the rules of the Single Market and the Union Customs Code.” 

He also indicated that this backstop has no implications for the movement of people between Ireland and the United Kingdom, and said that “regulatory alignment with the single market would be strictly limited to what is needed to avoid a hard border, notably for goods.” 

ICTSD reporting; “Customs union Q&A: what is it and can the UK manage without it?,” THE GUARDIAN, 23 April 2018; “Brexit bill: May under pressure after two big defeats in Lords,” THE GUARDIAN, 18 April 2018; “EU Withdrawal Bill: amendments and debates,” INSTITUTE FOR GOVERNMENT, 20 April 2018; “Can parliament force a government U-turn on the UK’s customs union membership?,” THE NEW STATESMAN, 23 April 2018; “Customs union: the battleground set to decide the fate of Brexit,” THE FINANCIAL TIMES, 25 April 2018; “PM expected to delay customs decision to appease key Brexiters,” THE GUARDIAN, 1 May 2018.

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