The former head of customs procedures for the European Commission tears into May’s proposalsby Michael Lux / July 16, 2018 / Leave a comment
The UK wants to remain in the single market for goods, but not for services. It also wants to end the free movement of people. Added to this, it hopes its “facilitated customs arrangement” will prevent the need for border checks.
The first obstacle is whether the European Union will accept cherry-picking, which is contrary to its negotiation guidelines and which it has not allowed so far for any third country.
There is also the question of whether hardline Brexiteers will accept it. Apart from these political obstacles, are the technical proposals realistic?
The UK suggests the following on goods and customs. It would apply the EU’s tariffs and trade policy for goods intended for the European market, but apply its own for goods intended for the domestic market. This is complicated but worth spelling out.
– where a good reaches the UK border, and the destination can be robustly demonstrated by a trusted trader, it will pay the UK tariff if it is destined for the UK and the EU tariff if it is destined for the EU;
– where the destination cannot be robustly demonstrated, it will pay the higher of the UK or EU tariff. Where the destination is later identified to be a lower tariff jurisdiction, the trader would be eligible for a repayment from the UK government equal to the difference between the two tariffs.
But there’s a problem. If the UK collects duties on behalf of the EU, it must also accept supervision by EU institutions such as the Commission’s Department for Budget and the European Court of Auditors, and it must accept rulings from the European Court of Justice. In her foreword to the government’s new white paper, Theresa May rejects all of this. Furthermore, trust in the UK applying rigorous controls on goods coming from third countries is not high in EU circles, following a damning report last year by the ECA.
One basic contradiction of the white paper is that the UK wants to leave the EU customs union and fiscal territory, but wants at the same time to avoid border formalities (eg customs declarations) between the UK and the EU. As I have explained in my earlier blog, you can’t have both: either you are in the customs union territory or you are out.
By leaving the…