DAVID Davis will propose a “have-cake-and-eat-it” temporary customs union between Britain and the EU to allow the UK to continue trading freely with Europe while also negotiating new deals with other countries.
The proposal, outlined in a position paper expected to be released today, comes just days after Chancellor Philip Hammond and International Trade Secretary Liam Fox said they wanted out of the customs union as soon as the UK leaves Europe.
Being in the customs union effectively means that once goods have cleared customs in one country, they can then be shipped to the others without any further tariffs, or checks. However, being in the customs union means the UK cannot make bilateral trade deals with non-EU countries.
READ MORE: Nicola Sturgeon brands UK Government customs union plan as "daft"
Brexit Secretary Davis’s push for an “interim” transition period, which would allow the UK to be both in and out of the customs union at the same time, will almost certainly be rejected by Brussels.
The Department for Exiting the EU claimed the time-limited transition would also benefit the continent as businesses on both sides would only have to adapt once to rule changes.
Negotiations on a new system are not scheduled to start until after the UK has settled the three prongs of the divorce: settling debts; the rights of EU citizens in the UK and UK citizens in the EU; and the border between Northern Ireland and Ireland.
The Government said it was releasing the paper to show the UK’s “desire to ensure our exit from the EUis smooth, orderly and successful”.
Davis’s paper is also expected to propose a customs partnership with the EU to “negate the need for a customs border between the UK and the rest of the bloc”.
Labour MP Chris Leslie called the Tory proposals a “fantasy”. “It looks like the new unified position in the Cabinet is to return the Government to the territory of wanting to have their cake and eat it,” Leslie said.
“Ministers claim we can leave the Customs Union and yet still achieve ‘the most frictionless customs agreement anywhere in the world’ but with absolutely no detail about how such a miraculous system will be achieved.
“It is a fantasy to pretend we can have the freest and most frictionless trade possible with our largest partner when the Government remain intent on pulling Britain out of the customs union.”
Adam Marshall, director general of the British Chambers of Commerce, said most businesses were more concerned about future customs arrangements with the EU than future trade deals.
Guy Verhofstadt, from the European Parliament, also tweeted that the UK's proposed customs union plan is "a fantasy".
To be in & out of the Customs Union & "invisible borders" is a fantasy. First need to secure citizens rights & a financial settlement
— Guy Verhofstadt (@GuyVerhofstadt) August 15, 2017
He added: “At this stage, it is critically important to keep a number of different options open in order to achieve this goal. While we await the detail of the Government’s customs position paper, and the reactions of EU negotiators, business is clear that a smooth transition to new arrangements is needed, and multiple adjustment costs must be avoided.
“In the long term, we should aim to avoid imports and exports being subjected to two sets of customs checks, and to ensuring the smoothest possible future trade relationship between the UK and EU.”
Meanwhile. ahead of the release of a positioning paper on the border between Northern Ireland and Ireland later this week, Sinn Fein warned the UK Government against imposing a customs frontier.
The party dismissed any suggestion that trade movement via any of the 200 crossings on the Irish border could be “frictionless” and monitored by technology as “nonsense”.
David Cullinane TD, Sinn Fein’s spokesman on Brexit, said: “It is clear is that Tories are prepared to use Ireland as collateral damage in their negotiations with the EU. What we need is a real solution that works for our economy, our communities, and delivers for all Ireland.”
Democratic Unionist MP Sir Jeffrey Donaldson insisted only the main arterial routes need be monitored. He said: “We are confident that we can deal with this in a pragmatic way.”
Meanwhile, Ulster Unionist leader Robin Swann urged the Dublin government to kill off any suggestion a customs border could be imposed in the Irish Sea, around the island rather than dividing it. Taoiseach Leo Varadkar has said the proposal is not one he is tabling as a potential option.
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