Brexit: UK suggests 'temporary customs union' with EU

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The EU’s customs union means members charge the same tariff on goods coming from other countries

The UK has set out the “ambitious new customs arrangement” it wants to secure with the EU after Brexit.

Ministers said the plans would mean the “freest and most frictionless possible trade” with the rest of Europe.

This could include a “temporary customs union” after Brexit to prevent border problems as the UK leaves the EU.

Businesses have called for clarity since the UK said it was leaving the customs union – the EU’s tariff-free trading area – as part of Brexit.

Countries in the customs union don’t impose tariffs (taxes on imports) on each other’s goods.

Members also agree to impose the same external tariffs on goods from other countries.

So, for example, a 10% tariff is imposed on some cars imported from outside the customs union, while 7.5% is imposed on roasted coffee.

Other goods – such as soap or slate – have no tariffs.

The UK’s departure from the EU’s customs union was confirmed at the weekend in a joint article by Chancellor Philip Hammond and Trade Secretary Liam Fox.

‘Streamlined’ border

According to the newly-published government paper, the UK could ask Brussels to establish a “temporary customs union” after it leaves the EU in March 2019.

But during this period, it would also expect to be able to negotiate its own international trade deals – something it cannot do as an EU customs union member.

Once this period expires, the UK will look to agree either a “highly streamlined” border with the EU, or a new “partnership” with no customs border at all.

The government said the interim arrangements would mean businesses would only have to adjust once to the new arrangements.

All of this will have to be negotiated with the EU – and the two sides have not yet even started discussing trade matters.

Other obstacles – including the size of the UK’s “divorce bill” – need to be agreed first.

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Brexit Secretary David Davis (left) and the EU Commission’s Michel Barnier are leading the negotiations for the two sides

BBC political correspondent Ben Wright said the UK government was “straining to show that it does have a route-map for Brexit”.

He said ministers were also attempting to “subtly” put the issue onto the negotiating table sooner than Brussels wants.

EU negotiators have previously said they want to settle the UK “divorce bill” with the EU and the issue of the movement of people before discussing trade.

“They want to hustle EU negotiators into talking about trade much sooner than Brussels intends,” our correspondent said.

Cabinet divisions

The customs union document is the first of a series of papers to be published by the UK government on key negotiation issues.

On Wednesday it is expected to set out proposals for the border between Northern Ireland and the Republic of Ireland.

The government, which has faced accusations that cabinet divisions are hampering its negotiations, said the publications reflected the “huge body of work” done since the UK voted to leave the EU in June 2016.

As well as collecting duties, customs checks include enforcing environmental and health and safety rules, cracking down on counterfeit goods, and checking “certificates of origin” saying where items have come from.

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