Labour is getting away with ignorance and dishonesty in the customs union debate
This morning on BBC Radio 4 Today the Shadow Brexit Minister Paul Blomfield MP set out once again the Labour Party’s highly disingenuous and confused Brexit policy. It’s easy to criticise from a distance when in opposition – especially when the government is such a state of conflict and uncertainty – but Labour’s approach to Brexit is just as unviable and unclear.
Since making it official policy to negotiate a customs union with the EU, Labour has taken smug pot shots at the government’s lack of solutions. Yet Labour’s own solution is fundamentally dishonest and unrealistic. Sadly, as is so often the case on the subject of Brexit, Blomfield was allowed to spout untruths and nonsense unopposed.
So, allow me to clear some things up. Paul Blomfield asserted that negotiating a customs union with the EU would mean ‘no hard border’ with the Republic of Ireland. Wrong. A customs union does not even come close to solving the Irish border. There is no excuse for getting the basics wrong on this anymore. The EU Customs Union was created in 1958 and it did not abolish border controls and even a comprehensive UK-EU Customs Union covering all goods will not remove the need for border checks.
By creating a Common External Tariff, the EU Customs Union abolishes customs duties and import quotas between its members thereby reducing the costs of trade. Moreover, it facilitates cross border movement of goods by removing the need for onerous procedures related to Rules of Origin (ROO). However, as the EU-Turkey border shows, a customs union does nothing to alleviate the myriad of technical barriers to trade that remain due the need to prove regulatory conformity. The EU Customs Union has nothing to do with the regulation of goods and product standards.
It’s regulatory harmonisation that abolishes most of the border controls for goods, because the conformity to the relevant standards is assumed and does not have to be proven, meaning goods don’t have to be checked at the border. This seems to be getting lost in the tedious debate on customs unions; regulatory harmonisation eliminates non-tariff barriers and creates low friction borders. Free movement of goods is created by the combination of the Single Market, the Common External Tariff and the EU VAT code – and it’s the Single Market that is by far the most important element of this. A customs union alone does not soften Brexit to anything like the extent that Labour is asserting.
Paul Blomfield also said that the UK would negotiate its trade agreements in partnership with the EU. This is for the birds, a totally daft and unrealistic idea. By leaving the EU we are leaving the Common Commercial Policy. The EU will pursue its own trade policy and it will not include non-members in its negotiations or its trade agreements. Why would it? How would this benefit the EU?
In any case, Blomfield simply revealed his own ignorance, because a customs union would not prevent the UK from negotiating its own trade agreements. It’s the Common Commercial Policy (an intrinsic element of the EU Customs Union) which gives the Commission exclusive control of trade policy. While a customs union we negotiate separately will restrict trade policy in the areas it covers, it does not preclude it entirely. How restrictive a customs union agreement is depends entirely on what products it covers. As Labour is proposing to replicate the EU Customs Union, meaning it will cover all goods, their policy is the most restrictive possible and will prevent the UK settings its own tariffs.
As a final selling point, Blomfield said that Labour’s policy will mean that the UK can stay party to all existing trade agreements it benefits from as part of its EU membership. This, again, is wrong. By leaving the Common Commercial Policy we lose access to those agreements and still will need to work on rolling them over so that they continue to apply after we’ve left the EU.
Labour should not be allowed to get away with this and it’s frustrating that Mishal Husain did not have a strong enough grip on the details to hold Paul Blomfield to account for his confused ideas and apparent ignorance. Instead we had the ignorant questioning the ignorant. At this point, the basic details have been disseminated enough that the lack of quality and knowledge in the debate is inexcusable. If Labour are saying they mean to stay in the EU Customs Union and harmonise our regulations with the EU they should be honest and say so.