What is the customs union, will Britain stay in one after Brexit and is it connected to the single market?

The Prime Minister promised to strike a free trade agreement with the EU after the transition period – but what is a customs union and what is Labour's position?

What is the EU customs union?

The European Union's customs union is a trade agreement between all EU member states and three other countries – Turkey, Andorra, and San Marino – which allows goods to be shipped all around the EU as long as they clear customs in one participating country.

The countries sit down and decide to apply the same tariffs to goods from outside the union.

Britain's membership of the customs union stops us negotiating free trade agreements with other countries – a key campaign pledge of the successful Leave campaign during the EU referendum in 2016.

Leaving has the potential to cause problems with the Irish border and for certain sectors of industry.

Leaving would lead to mandatory customs checks for every lorry from Britain to the EU unless a free trade deal is struck with Brussels.

Why has Theresa May indicated the UK will quit the customs?

Theresa May has long been clear she will seek to leave the single market and the Customs Union – allowing Britain to escape the authority of Brussels and strike its own global trade deals.

She is keen to draw up a bespoke trade deal with the EU, allowing for the free flow of goods and services while cracking down on European immigration.

EU leaders warned the UK cannot access the single market while also capping immigration on people from its member states – one of the PM's so-called red lines outlined in her famous Mansion House speech.

Speaking following the announcement the UK and EU had agreed to progress talks to the next stage, Donald Tusk, the President of the European Council, made a number of references to the Single Market.

He said: "The UK has asked for a transition of about two years, while remaining part of the Single Market and Customs Union.

"We will be ready to discuss this, but naturally, we have our conditions."

Mr Tusk and the EU want the UK to respect:

  • the whole of EU law, including new laws
  • respect budgetary and financial commitments
  • respect judicial oversight
  • and all other related obligations

May has said she is "not considering" to remain in the customs union with the EU in order to secure support on her Brexit deal by other parties.

A No10 spokesman said that the PM has been "absolutely clear" that the government is opposed to the idea, adding "we must have an independent trade policy after Brexit".

When will the UK leave the EU single market and customs union?

Parliament approved the Brexit bill on May 13, 2017, – allowing Prime Minister Theresa May to trigger the formal process of leaving the EU.

Brexit "divorce talks" began in June following the General Election.

On March 29, 2019, Britain is scheduled to depart the EU at 11pm. Following 'Brexit Day' there will be a transition or implementation period which is currently slated to last until December 2020.

What is Theresa May's facilitated customs arrangement?

After a crunch summit at Chequers in the summer of 2018, the PM and her Cabinet put forward her strategy for Britain's post-Brexit relationship with the EU.

One of the central points of her plan is a facilitated customs arrangement which will allow the UK to set its own tariffs on goods arrival in the country.

Borders between the UK and EU would be treated as a "combined customs territory" and would see the UK apply tariffs and trade policies for goods destined for the UK but charge EU tariffs for goods bound for the EU.

The Government believes this system removes the threat of a hard border in Ireland.

What will happen if Britain leaves the single market and customs union?

If Britain leaves the single market and customs union, it may not be given the same complete freedom to move money, people and products around the EU.

The European Union will only allow the UK to be part of the European single market if it continues to allow EU nationals the right to live and work in the UK.

And being a member of the customs union would stop the UK striking free trade deals with other nations.

Theresa May and Olly Robbins, her chief Brexit adviser from the Civil Service, have floated the idea of a scheme which would see Britain continue to collect tariffs on behalf of the EU for goods which enter the UK which are destined for member states.

Boris Johnson has said he would support May's Brexit deal if she secures a major change to the backsop so the UK doesn't get stuck in the EU customs union.

What is Labour's position on the customs union?

Labour are campaigning to remain in the customs union after Brexit while negotiating a new arrangement.

After months of muddled uncertainty, Jeremy Corbyn announced in February 2018 that his party would back the move.

Labour wants to see Britain in a bloc where goods and services can move across EU borders without hindrance.

But it is likely to stop Britain being able to negotiate its own deals with the rest of the world.

Shadow Brexit Secretary Sir Keir Starmer told the BBC: "We all want to do bold new trade agreements but we'd be better off doing that with the EU".

Mr Corbyn said he wants a "new and strong relationship" with the EU single market that includes "tariff-free access".

But Labour Leaver Frank Field MP said the U-turn would "rat on the people's decision to leave".

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