THE BLOG
25/03/2019 14:52 GMT | Updated 25/03/2019 14:52 GMT

Labour MPs Must Not Support Joining A Customs Union – Here's Why

Customs Union membership solves nothing on its own and creates significant risk for British industry and jobs, especially in Labour’s traditional heartlands

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MPs will be voting on a series of Brexit options today and tomorrow, including the possibility of softening Brexit through membership of the Customs Union. These indicative votes, if carried, will not bind the government, but they are an important signal to the country for how different parties and MPs think. A number of Labour MPs, and potentially even the leadership, will be inclined to vote in favour of softening Brexit. But this would be devastating for the party and the country.

It is Labour Party policy for the UK to be in a Customs Union with the EU to ensure free circulation of goods. But are all those who advocate this policy aware of the major problems which this approach will bring? The reality is that membership of the CU would threaten British jobs and diminish Britain’s role in the developing world, without eliminating the need for checks on goods. Here’s what the problems are.

Firstly, free circulation of goods comes not only from the Customs Union rules but also from the rules of the Single Market. Even if the UK were to be a full member of the EU Customs Union, this would only lessen checks on rules of origin, not eliminate them. Checks would be needed on animals and animal products (including processed food), as well as on plant and plant products (referred to as Sanitary and Phytosanitary or SPS measures). Checks would also be needed from rules arising from technical regulations and standards that define specific characteristics that a product should have. If the UK was in a CU, not the CU (like Turkey), the UK would need movement certificates for all relevant goods.

Secondly, I hate to have to tell you, but neither the CU or a CU-solution alone solve the Irish border. Checks would still be needed for trade in goods such as processed food which might require infrastructure on the border.

Thirdly, there is also a significant threat to British jobs from EU trade deals with third countries. When entering into new trade agreements, the EU negotiators can offer access to the UK’s market and 65million consumers without getting anything in return for the UK – and without the UK having a say. This is often referred to as the ‘Turkey Trap’ because Turkey is in a similar position. In practice, this will mean that the UK’s asks are last on the list for the EU while the asks of the other side, which particularly hit the UK, would be agreed first.

Like Turkey, the UK would have to follow-up with its own negotiations for access to third countries but without any leverage as market access to the UK would have already been agreed by the EU. Remember the outcry over the proposed EU-US FTA, more commonly known at TTIP, which was under negotiation 2013-16? Labour raised the alarm over private sector access to the NHS. At the time, the UK had an influence on the deal. In future, we will have none. If the UK is in a CU, trade remedies such as anti-dumping measures would be decided by the EU without any UK say. Would the EU take notice of practices largely or exclusively affecting the UK?

Fourthly, the impact of joining the Customs Union on the developing world and our influence within it is often overlooked. Under this approach, the UK will no longer be a champion for trade with the developing world because we will have no say over the EU’s trade agreements and will not be allowed to have our own. Our support for fair trading practices with developing countries – of which many from the Labour movement have a proud history – has given the UK influence in areas like security, counter-terrorism and post-conflict peace operations. Many of these countries, including India, Sri Lanka, Pakistan and the English-speaking Caribbean, have large diasporas in the UK (and in many Labour constituencies) who may resent having no way to positively influence trading relationships.

Finally, if we are members of the Customs Union, we would also have to be members of the Common Agricultural Policy and Common Fisheries Policy. What is more, as a Customs Union does not alleviate the need for checks on goods and agri-foods, for genuine free circulation the UK would need to abide by the rules of the Single Market in those areas. 

Members of the PLP need to consider whether avoiding the small but increased friction on the circulation of some goods is more important than the ability to protect British industry, such as ceramics, steel, fishing and agriculture, to promote the trade interests of the developing world and to strengthen our relationships with those developing nations.

MPs need to decide if being members of the Customs Union – without a voice in the decision-making – would be in the nation’s, and Labour’s interest. Does it respect the referendum result? Is it worth putting our farmers, fisheries, a wide spread of what is left of our manufacturing industry and our NHS at risk from trade deals we can’t influence?

Customs Union membership solves nothing on its own and creates significant risk for British industry and jobs, especially in Labour’s traditional heartlands. Joining the Single Market on top of the Customs Union would ease circulation of goods but would mean still paying a hefty membership due and following all the rules – including unlimited free movement – but without a say. How do we stand up for people and protect jobs if we have no say? How do we take power if we lose great swathes of seats across the Midlands and the North? Are we destined to become the party of the service economy, abandoning those who make and grow? 

No sizeable country outside the EU – including Norway and Switzerland – is in a full Customs Union with the EU (only San Marino and Andorra) because the disadvantages far outweigh the advantages. Do we really want this for the UK?