UK must stay in customs union with EU, business group says


LONDON • The UK should ensure it stays in a close and comprehensive customs agreement with the European Union (EU), providing tariff-free trade in all goods after Brexit, according to the leader of a major business group.

Remaining in a customs union with the EU will be far more valuable than striking trade deals elsewhere, Carolyn Fairbairn, DG of the Confederation of British Industry (CBI), will say today, based on excerpts from her prepared remarks.

“The idea behind a customs union is simple: A single set of tariffs for goods imported from outside the EU, enabling tariff free trade within it,” Fairbairn will say. “It brings no obligations over freedom of movement, or payment and removes some of the heaviest trade barriers.”

Prime Minister Theresa May aims to take Britain out of the EU’s 28-country customs union to gain the freedom to sign new trade agreements with other nations such as the US, Australia and New Zealand.

Brexit-supporters in her Tory party say winning back the power to make Britain a “global trading nation” is a key prize of escaping the EU’s rules.

But Fairbairn and other business leaders such as Mike Thompson, who represents the country’s pharmaceutical industry, disagree. “Any change to existing customs arrangements could create border chaos, cause damaging delays and ultimately put patients and public health at risk,” Thompson, CEO of the Association of the British Pharmaceutical Industry, said by in emailed remarks yesterday.

May’s ministers and officials are working to hash out what they want the final Brexit trade deal to look like. French President Emmanuel Macron on Saturday said the country will likely end up with something “between full access and a trade agreement”. The UK and EU aim to negotiate a transitional phase by the end of March, before moving on to map the future trading terms by October.

The CBI, which represents 190,000 UK businesses employing seven million people, wants Brexit negotiators to step up the pace of talks. “Time is running out — by March next year our country will be out of the EU,” Fairbairn will say. “We need to end this game of who-blinks-first and instead find a new spirit of urgency.”

Speaking at the University of Warwick, near the city of Coventry in central England, Fairbairn will call for a trade accord with the EU that is better than Canada’s, which excludes financial services.

Customs union membership would also resolve the question of how to keep an open border between Ireland and the UK, seen as important for maintaining peace, she will say.

Richard Tice, co-chair of the Brexit campaign Leave Means Leave, said staying in the customs union would “handcuff” British businesses.

“Only by leaving the customs union can the UK forge new independent trade deals with the rest of the world,” he said.