Indefinite by article, indefinite by natureBy Simon Usherwood on 27 February 2018
Jeremy Corbyn’s speech on Monday marked another step in the on-going Brexit debate in the UK. By confirming that Labour would support a continuation of customs arrangements with the EU, Corbyn sought to mark out a contrast with the Conservatives, claiming that a ‘new comprehensive customs union’ would work with a wider deal to avoid the erection of barriers with the European Union.
However, given that Theresa May has talked much about frictionless trade and transition periods, and that both talk of ‘bespoke trade arrangements’, it might be understandable that the woman on the Clapham Omnibus might struggle to grasp either the differences between the two, or the import of the various elements.
The starting point has to be a quick review of how the EU itself works, since this is the situation from which we’re working.
The Union is based around a system of market integration, which has developed over time. The various national markets firstly removed the quantitative barriers – quotas and tariffs – between each other, to create a free trade area.
Then they introduced a set of common external tariffs to third countries, to avoid external suppliers trying to divert trade into the cheapest entry-point in the grouping: this common external barrier is one key arm of the EU’s customs union.
The second arm of the EU’s customs union has been to give the power to negotiate trade deals with third parties to the Commission, since it represents the common interests of the member states and because letting individual members conclude their own terms of trade with third parties would break the logic on the common external tariff.
On top of this customs union, the EU has since built a largely complete single market, which involves removing further, non-tariff barriers (NTBs) to trade, all encapsulated under the famous ‘four freedoms’ of movement of goods, services, capital and people.
Those NTBs include such delights as regulatory standards, recognition of qualifications and minimum requirements on health and safety, as well as a big dose of mutual recognition, whereby states keep national standards, but accept that goods produced to meet standards in another member can also be sold elsewhere (read the most exciting of all the ECJ’s rulings for more on this concept).
By leaving the EU, a number of issues arise for the UK.
Firstly, the customs union shared by EU member states is for EU member states alone: its legal basis is in the EU’s treaties, so third states can’t be part of it directly. That legal nicety has seen many pixels die in the semantic wars over ‘the’ and ‘a’ customs union, for while the UK might not be able to stay in the EU’s customs union, it could conclude a custom union agreement with the EU. This already happens with Turkey, Andorra and San Marino, albeit with exclusions of certain categories of products.
Secondly, it is clear that tariffs are only part of the picture. The EU has long been a key activist in reducing global levels of tariffs, through the World Trade Organisation (WTO) and its predecessor GATT, so that they now are only a small fraction of their levels in the 1950s. Even if the UK does find a way to avoid the re-introduction of tariffs, associated with the customs union, then there would still be a problem around NTBs. To give one pertinent example, membership of a customs union alone would not obviate the need for border controls with Ireland, as there would remain requirements to check regulatory compliance too.
Again, it’s possible to extend parts – sometimes very significant parts – of the EU’s single market beyond the EU’s borders. The most extensive example is the European Economic Area (EEA), which brings Norway, Iceland and Liechtenstein into the large bulk of the single market, agriculture excluded. As with the examples previously mentioned, this is a specific agreement with specific countries, so simple extension of membership the UK isn’t simply a matter of adding the UK’s name to the list in the treaty text.
All of this goes a long way to rendering the question of ‘bespoke deals’ moot. Any package that the UK and EU conclude will be necessarily be bespoke. This will be the case both in the mundane sense of needing to list the UK specifically, but also in the more substantive sense of what’s included and on what terms: because the UK is moving from a situation of regulatory alignment (as a soon-to-be former member state) to one of dealignment (either actual or potential): this will change the baseline from which negotiators will work up a text.
However, in all of this there remain large uncertainties. Neither Corbyn nor May have mapped out a strategic vision that will underpin the new relationship with the EU. Without this, it will be difficult to work out how any given element of customs or single market cooperation or involvement will fit in to the wider agenda of government. More pertinently, without that vision, it will be harder for UK negotiators to define what they must achieve from the Article 50 talks, which in the long run will be to no one’s benefit.
Simon Usherwood is Reader in Politics at the University of Surrey and Deputy Director of the ESRC's UK in a Changing Europe programme. He tweets @Usherwood.
Image: European Parliament CC BY-NC-ND