In what was a rare victory in recent weeks for Theresa May, the British prime minister has won support from a majority of MPs at Westminster to return to the EU and reopen Brexit negotiations. However, EU leaders immediately indicated their unwillingness to revisit the Brexit withdrawal agreement. The crux of the deadlock is the future of the border between Ireland and Northern Ireland.
Central to this impasse is customs policy – a previously obscure aspect of UK trade relations. What has moved the issue centre stage has been the fierce attachment of the Irish government to the absence of a supervised or “hard” border on the island of Ireland. One essential reason why such a border disappeared in 1998 under the Belfast/Good Friday Agreement was the existence of an EU customs union between the UK and the Republic of Ireland.
Any customs union has two aspects. First, the abolition of internal tariffs – taxes on goods crossing borders – and second, a common external tariff wall, imposing a uniform tariff on any goods entering the customs union from outside. The advantage of such a union is clear: it avoids the need for those border checks that involve controlling for tariffs.
Contrary to what the Labour leader Jeremy Corbyn appears to believe, however, creating a customs union does not relieve the need for all border checks on goods. To do that, Northern Ireland (or the whole UK) must remain aligned with EU single market rules on things such health, consumer, agricultural and veterinary standards, because these too require border checks. This is why there has been a longstanding – and effective – insistence from Ireland that Northern Ireland, either alone or with the UK as a whole, both stay within a customs-union type arrangement with the UK and retain elements of the EU single market.
A customs union on its own would not be enough to completely eliminate controls on the Irish border. But it makes an essential contribution to eliminating them. Hence Irish attachment to the idea.
Brexiters, however, hate the idea of a customs union. It’s viewed as obstructing their great vision of a global Britain, whereby the UK negotiates its own tariff rates with other countries, securing better terms than a cumbersome, slow-moving EU. The dream is an unreal fantasy, since the UK with a population of 66m lacks anything near the bargaining power of an EU with a population of 512m.
Labour policy of seeking a permanent UK customs union with the EU, appears more economically realistic. However, a Labour bid to allow MPs a vote on this proposal was rejected in parliament just before MPs voted in favour of “renegotiating” the Brexit deal.
