Brexit secretary David Davis said a customs agreement was in both the UK and EU’s interests ©PA Wire/PA Images
Brexit secretary David Davis said a customs agreement was in both the UK and EU’s interests ©PA Wire/PA Images

Government sets out post-Brexit customs plan

15 August 2017

The government has released a position paper outlining two possible visions for the UK’s long-term customs relationship with the EU after Brexit.

It proposes either a ‘streamlined customs arrangement’, where Britain unilaterally works to make its customs process as frictionless as possible, or a more formal customs partnership that would aim to remove the need for a customs border between the UK and the EU.

Both proposals would mean the UK leaving the EU customs union, and both envision Britain being able to forge its own international trade deals.

The chancellor Philip Hammond said: “Our proposals are ambitious, and rightly so. They set out arrangements that would allow UK businesses to continue to trade with their European partners in the future, while expanding their markets beyond the EU.”

The paper said the proposal Britain would pursue depended on how negotiations played out.

Under the first proposal the UK would try to negotiate trade concessions with the EU – for example waivers for certain goods and services – while unilaterally streamlining its own customs process using technological solutions and by making processess easier for businesses.

In the second proposal, Britain would still trade with the EU as a third party but would work with the EU to remove the need for a customs border between the two blocks by mirroring the EU's customs regulations and ensuring all goods entering the UK paid the correct duties. The UK would also be able to have its own tariff and trade policy for goods intended for the UK market.

Brexit secretary David Davis said it was in both the UK and Europe’s interest to reach an agreement on a future customs arrangement. “The UK starts from a strong position and we are confident we can deliver a result that is good for business here in the UK and across the EU,” he said.

The position paper also proposed an interim customs arrangement that it said could take the form of a “continued close association” with the EU customs union for a limited time period.

Davis told BBC Radio 4’s Today that an interim agreement would last around two years or less.

The CBI said the government’s commitment to look for an interim customs agreement was a “critical first step”. Josh Hardie, CBI deputy director-general, said: “This clarity is vital for businesses making long-term investment decisions today.

“Much will rest on the negotiation, and – as the paper acknowledges – EU customs systems will need to adapt too. There is clear interest on both sides in avoiding a cliff-edge and keeping trade flowing, not just at Dover, but Rotterdam, Calais and Antwerp too.”

The British International Freight Association (BIFA) was also generally positive about the position paper but director general Robert Keen expressed concerns about the UK’s ability to negotiate either agreement.

“Unfortunately, what the paper cannot address is the fact that, so far, the EU has made clear it will not discuss Britain’s future trading relationship, including customs arrangements, until it has reached agreement on several key issues,” he said. 

This view was echoed by the EU’s chief negotiation, Michel Barnier, who tweeted today: “The quicker #UK & EU27 agree on citizens, settling accounts and #Ireland, the quicker we can discuss customs & future relationship.”

The paper is the first of several documents promised by the government to flesh out its Brexit plan.

Last month the Amyas Morse, head of the National Audit Office, warned the UK’s new electronic customs system might not be in ready in March 2019, leading to a “horror show” at the border.

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