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| Brexit: UK suggests 'untested' customs system with EU | |
| (about 2 hours later) | |
| The government says it will propose an "innovative and untested approach" to customs checks as part of its Brexit negotiations. | |
| The model, one of two being put forward in a newly-published paper, would mean customs checks would not be needed at UK-EU borders. | |
| But "robust" enforcement would be required to avoid the UK being used to bypass EU border rules. | |
| A key EU figure said the idea of "invisible borders" was a "fantasy". | |
| On Twitter, Guy Verhofstadt, the European Parliament's negotiator, added that other issues had to be agreed before negotiations on trade could begin. | |
| The UK has already said it will leave the customs union - the EU's tariff-free trading area - after Brexit, and businesses have calling for clarity on what the replacement system will involve. | |
| The UK's proposals, detailed in what it calls a "future partnership paper", also include the possibility of a "temporary customs union" after the UK leaves the EU in March 2019 to avoid a "cliff-edge" for business as they adapt to the new arrangements. | |
| What is the customs union? | What is the customs union? |
| Countries in the customs union don't impose tariffs - taxes on imports - on each other's goods. | Countries in the customs union don't impose tariffs - taxes on imports - on each other's goods. |
| Every country inside the union levies the same tariffs on imports from abroad. | Every country inside the union levies the same tariffs on imports from abroad. |
| So, for example, a 10% tariff is imposed on some cars imported from outside the customs union, while 7.5% is imposed on roasted coffee. | So, for example, a 10% tariff is imposed on some cars imported from outside the customs union, while 7.5% is imposed on roasted coffee. |
| Other goods - such as soap or slate - have no tariffs. | Other goods - such as soap or slate - have no tariffs. |
| The UK's departure from the EU's customs union was confirmed at the weekend in a joint article by Chancellor Philip Hammond and Trade Secretary Liam Fox. | The UK's departure from the EU's customs union was confirmed at the weekend in a joint article by Chancellor Philip Hammond and Trade Secretary Liam Fox. |
| A 'streamlined' border | A 'streamlined' border |
| According to the newly-published government paper, the UK could ask Brussels to establish a "temporary customs union" after it leaves the EU in March 2019. | According to the newly-published government paper, the UK could ask Brussels to establish a "temporary customs union" after it leaves the EU in March 2019. |
| But during this period, it would also expect to be able to negotiate its own international trade deals - something it cannot do as an EU customs union member. | But during this period, it would also expect to be able to negotiate its own international trade deals - something it cannot do as an EU customs union member. |
| Once this period expires, the UK will look to agree either a "highly streamlined" border with the EU, or a new "partnership" with no customs border at all. | Once this period expires, the UK will look to agree either a "highly streamlined" border with the EU, or a new "partnership" with no customs border at all. |
| The government said the interim arrangements would mean businesses would only have to adjust once to the new arrangements. | The government said the interim arrangements would mean businesses would only have to adjust once to the new arrangements. |
| All of this will have to be negotiated with the EU - and the two sides have not yet even started discussing trade matters. | All of this will have to be negotiated with the EU - and the two sides have not yet even started discussing trade matters. |
| Other obstacles - including the size of the UK's "divorce bill" - need to be agreed first. | Other obstacles - including the size of the UK's "divorce bill" - need to be agreed first. |
| Brexit secretary's view | Brexit secretary's view |
| David Davis, Secretary of State for Exiting the European Union, said he envisioned the interim customs system being "as close as we can to the current arrangements", but with the UK able to negotiate and sign its own international trade deals. | David Davis, Secretary of State for Exiting the European Union, said he envisioned the interim customs system being "as close as we can to the current arrangements", but with the UK able to negotiate and sign its own international trade deals. |
| Speaking on BBC Radio 4's Today programme, he did not rule out the UK paying to be part of the arrangement, saying he was not going to conduct negotiations on air. | Speaking on BBC Radio 4's Today programme, he did not rule out the UK paying to be part of the arrangement, saying he was not going to conduct negotiations on air. |
| And he said he did not believe the European Court of Justice would be the arbiter of the temporary arrangement, adding that the government would publish proposals on "international arbitration" next week. | And he said he did not believe the European Court of Justice would be the arbiter of the temporary arrangement, adding that the government would publish proposals on "international arbitration" next week. |
| Mr Davis businesses were worried about "the infamous cliff edge" - the UK leaving the EU without replacement trade and customs deals. | Mr Davis businesses were worried about "the infamous cliff edge" - the UK leaving the EU without replacement trade and customs deals. |
| He added that the period should be "something like two years, maybe a bit shorter" but said the transition period had "to be done by the election", which has to take place by 2022 at the latest. | He added that the period should be "something like two years, maybe a bit shorter" but said the transition period had "to be done by the election", which has to take place by 2022 at the latest. |
| What the EU says | What the EU says |
| A European Commission spokesman said: "We will now study the UK position paper on customs carefully in the light of the European Council guidelines and the council's negotiating directives. | A European Commission spokesman said: "We will now study the UK position paper on customs carefully in the light of the European Council guidelines and the council's negotiating directives. |
| "The next negotiation round will start in the week of 28 August. | "The next negotiation round will start in the week of 28 August. |
| "We take note of the UK's request for an implementing period and its preferences as regards the future relationship, but we will only address them once we have made sufficient progress on the terms of the orderly withdrawal. | "We take note of the UK's request for an implementing period and its preferences as regards the future relationship, but we will only address them once we have made sufficient progress on the terms of the orderly withdrawal. |
| "An agreement on a future relationship between the EU and the UK can only be finalised once the UK has become a third country. | "An agreement on a future relationship between the EU and the UK can only be finalised once the UK has become a third country. |
| "As Michel Barnier has said on several occasions, 'frictionless trade' is not possible outside the single market and customs union." | "As Michel Barnier has said on several occasions, 'frictionless trade' is not possible outside the single market and customs union." |
| The EU is also working on a position paper on the customs union. | The EU is also working on a position paper on the customs union. |
| Meanwhile Guy Verhofstadt, the European Parliament's chief Brexit negotiator, has tweeted: "To be in & out of the Customs Union & "invisible borders" is a fantasy. First need to secure citizens rights & a financial settlement" | |
| Mixed UK reaction | Mixed UK reaction |
| Keir Starmer, Labour's shadow Brexit secretary, said the proposals were "incoherent and inadequate" and were designed to "gloss over deep and continuing divisions within the cabinet". | Keir Starmer, Labour's shadow Brexit secretary, said the proposals were "incoherent and inadequate" and were designed to "gloss over deep and continuing divisions within the cabinet". |
| "These fantastical and contradictory proposals provide no guidance for negotiators or certainty for businesses," he added. | "These fantastical and contradictory proposals provide no guidance for negotiators or certainty for businesses," he added. |
| Liberal Democrat Brexit spokesman Tom Brake said the plan would "only delay the economic pain caused by leaving the customs union". | Liberal Democrat Brexit spokesman Tom Brake said the plan would "only delay the economic pain caused by leaving the customs union". |
| "We still face the prospect of more red tape for businesses, longer queues at our borders and higher prices for consumers once the transition comes to an end." | "We still face the prospect of more red tape for businesses, longer queues at our borders and higher prices for consumers once the transition comes to an end." |
| However, the CBI, which represents British businesses, said the proposal was "encouraging". | However, the CBI, which represents British businesses, said the proposal was "encouraging". |
| Its deputy director general, Josh Hardie, added: "The clock is ticking and what matters now is giving companies the confidence to continue investing as quickly as possible." | Its deputy director general, Josh Hardie, added: "The clock is ticking and what matters now is giving companies the confidence to continue investing as quickly as possible." |
| Adam Marshall, director general of the British Chambers of Commerce, said most businesses were more concerned about future customs arrangements with the EU than future trade deals. | Adam Marshall, director general of the British Chambers of Commerce, said most businesses were more concerned about future customs arrangements with the EU than future trade deals. |
| "In the long term, we should aim to avoid imports and exports being subjected to two sets of customs checks, and to ensuring the smoothest possible future trade relationship between the UK and EU." | "In the long term, we should aim to avoid imports and exports being subjected to two sets of customs checks, and to ensuring the smoothest possible future trade relationship between the UK and EU." |
| MEP and former UKIP leader Nigel Farage attacked the government's proposals. | |
| "We might find ourselves 10 years down the road from Brexit having not got what we wanted," he said. | |
| "There's no doubt that during this transitional period, the free movement of people will continue, the European Court of Justice will go on having judgements over British business and, of course, we'll go on paying a membership fee. | |
| "None of those three things are acceptable to Brexit voters in any way at all." | |
| Analysis: UK 'hustles' Brussels | Analysis: UK 'hustles' Brussels |
| Adam Fleming, BBC Brussels reporter, said the UK was seeking a customs union agreement "that will keep things broadly the same for an interim period - an attempt to reassure business". | Adam Fleming, BBC Brussels reporter, said the UK was seeking a customs union agreement "that will keep things broadly the same for an interim period - an attempt to reassure business". |
| "Firms will be told they'll only have to change their processes once," he said. | "Firms will be told they'll only have to change their processes once," he said. |
| "In Brussels, EU negotiators are likely to stick to their position that that the future relationship can't be considered until agreement has been reached on their priority issues - the rights of citizens, a financial settlement and the Irish border." | "In Brussels, EU negotiators are likely to stick to their position that that the future relationship can't be considered until agreement has been reached on their priority issues - the rights of citizens, a financial settlement and the Irish border." |
| BBC political correspondent Ben Wright said the UK government was "straining to show that it does have a route-map for Brexit". | BBC political correspondent Ben Wright said the UK government was "straining to show that it does have a route-map for Brexit". |
| He said ministers were also attempting to "subtly" put the issue onto the negotiating table sooner than Brussels wants. | He said ministers were also attempting to "subtly" put the issue onto the negotiating table sooner than Brussels wants. |
| "They want to hustle EU negotiators into talking about trade much sooner than Brussels intends," our correspondent said. | "They want to hustle EU negotiators into talking about trade much sooner than Brussels intends," our correspondent said. |
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