Monday 23 July 2018

Q&A: UK wants cake and a licence to eat it with its customs proposals

British Prime Minister Theresa May. Picture: Getty
British Prime Minister Theresa May. Picture: Getty
Colm Kelpie

Colm Kelpie

Q: What has the UK proposed in relation to the Border?

A: It wants a new customs partnership with the EU, which it said would be "innovative and untested", but would remove the need for any customs checks between the UK and EU. The UK says if the EU backed this, there would be no need for customs checks between the North and Republic. Alternatively, it is proposing a "highly streamlined arrangement" that would reflect the "unique circumstances of Northern Ireland" and ensure no new customs processes for smaller firms, while continued membership of the Common Transit Convention would mean firms moving goods through the UK to mainland Europe would not be hit with duties. It also says it will be pushing to avoid physical border checks or posts on the Border, and there will be no border in the Irish Sea.

Q: So the UK wants a customs deal that avoids the need for borders. So it's not leaving the customs union.

A: It is. It wants a new arrangement that allows the UK to make its own trade deals with the rest of the world, and set its own customs duties and tariffs on goods bound for the UK. It said the UK's regime would "align precisely" with the EU's, for goods that will be consumed in the EU. But it would continue to operate its own checks on goods coming from outside the EU. It also wants an interim customs deal in place in March 2019, when it officially leaves the EU, which will have a "close association" with the customs union. This, it says, will allow for a smooth transition to a new trading regime between the UK and EU. But it doesn't want to be in the customs union after March 2019 because it wants to be able to negotiate its own trade deals.

Q: Hmm, a bit like having your cake and eating it?

A: I couldn't possibly comment. But now that you mention it ...

Q: How has our Government reacted?

A: It has welcomed the new papers as "timely and helpful". But Foreign Affairs Minister Simon Coveney said the UK's ask on customs facilitation will be difficult given its proposal to negotiate separate free trade agreements at the same time.

Q: That doesn't sound too positive. Any reaction from the EU side yet?

A: That's been a little bit more dismissive, which is worrying as the British proposals essentially rely on goodwill from Brussels. The European Parliament's Brexit lead Guy Verhofstadt claimed the UK's proposals were a "fantasy", while Michel Barnier, EU Brexit negotiator, said the quicker the UK and EU agree on citizens, settling accounts and Ireland, the quicker they can discuss customs and the future relationship.

Q: What if a deal can't be agreed?

A: The position paper, perhaps in a warning to the EU to consider its proposals strongly, states that EU member states should make preparations to mitigate the risks of customs delays in the event that the UK crashes out of the bloc in March 2019. It said it will bring forward a Customs Bill in the autumn that will give the British government the necessary powers to operate standalone customs, VAT and excise systems following its EU exit.

Irish Independent

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