A CUSTOMS UNION: FOR OR AGAINST?

BREXIT WAS ALWAYS GOING TO BE A MESSY BUSINESS. The Tories took charge of negotiations - strong on slogans and clueless on detail. They were and are against Britain being members of the EU Customs Union. What’s the problem? If Britain were to remain inside, then we are told that we couldn’t do independent trade deals with other countries.

Tariffs are a tax on imports. Countries may want to impose tariffs in order to make imports more expensive and protect domestic industry. Different countries within a customs union may want different tariff regimes.

If Britain stands outside the EU Customs Union on the other hand, and if we have different tariff arrangements from the EU, we would need to have ‘rules of origin’- to know where stuff comes from. To check that means a hard border with border checks.

Consider the case of the Mini’s car part, the crankshaft. It crosses the Channel three times on a 2,000 mile journey to different plants in Europe before the car rolls off the assembly line. These incredibly tight just-in-time supply chains are typical of modern manufacturing, and margins are slim. A tariff of 10% on foreign-made components could destroy the viability of UK car plants, as would the slightest bureaucratic impediment to the free movement of goods - causing queues of lorries at Dover. Nissan claims rebuilding a supply chain within the UK to avoid a hard border would cost hundreds of millions of pounds. Foreign owned firms like Nissan, BMW and Vauxhall are much more likely to decide to move production to the continent, where most of the cars are sold anyway.

Workers in the motor industry need tariff-free access to the EU, or their jobs are under threat.

Corbyn and his team have to react to the Tory proposals. We are not in charge of negotiations - more’s the pity. Our priority is jobs, not slogans. Jeremy Corbyn is a pragmatist. He accepts the referendum result. But the question of a customs union was hardly discussed during the referendum campaign.

Labour now has to consider how to minimise the damage of Brexit. The referendum vote was caused by a debate on EU membership launched by Cameron purely to settle infighting within the Tory Party. Corbyn wants to negotiate a customs union which is as closely aligned as possible with the existing EU Customs Union so as to eliminate trade disruption and safeguard jobs.

Trade is not really fair unless goods are like for like in quality. A comprehensive customs union would not by itself remove all need for border checks, unless all the goods transiting were guaranteed to meet agreed existing standards. Labour supports maintaining standards set by the EU on environmental protection, consumer rights and workers’ safeguards. Some of the Tories want to march out of the EU Customs Union in order to tear up these standards. That is the hidden agenda behind the rhetoric about leaving the EU Customs Union - a race to the bottom on standards.

The other intractable problem arising from a decision to leave the EU Customs Union is the Irish land border. The border has 275 crossing points, all of which would have to be policed in the event of tariffs between the UK and the EU. This would inevitably involve border posts and crossing controls.

The Tories have responded to this problem by invoking phantom technology, technology which does not actually exist at present, to solve it. By comparison inventing a fairy godmother is a trivial matter! Back in the real world the decision is clear. Britain either makes an arrangement with the EU Customs Union, or there is deadlock on crossborder trade within Ireland.

This is important for the UK. Theresa May has said, “We export more to Ireland than we do to China.” It is even more important to the Republic. Ireland stands on the western edge of Europe and most of its exports go to the EU via Britain. It would be devastating for the Republic’s exports if they were stymied by a hard border with the UK. This could also threaten the Good Friday Agreement and the peace process in Northern Ireland. Some Tories see this as a ‘price worth paying’ for their hard Brexit.

Brexit under the Tories provides no benefits for working people and opens up many dangers.