This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/politics/2018/feb/04/decision-time-government-brexit-trade-policy-ministers-eu
The article has changed 8 times. There is an RSS feed of changes available.
| Version 1 | Version 2 |
|---|---|
| Decision time this week for government on Brexit trade policy | Decision time this week for government on Brexit trade policy |
| (about 5 hours later) | |
| Ministers will struggle to agree whether negotiators should put EU over far-flung markets | Ministers will struggle to agree whether negotiators should put EU over far-flung markets |
| Dan Roberts Brexit policy editor | Dan Roberts Brexit policy editor |
| Sun 4 Feb 2018 16.17 GMT | Sun 4 Feb 2018 16.17 GMT |
| Last modified on Sun 4 Feb 2018 22.01 GMT | |
| Share on Facebook | Share on Facebook |
| Share on Twitter | Share on Twitter |
| Share via Email | Share via Email |
| View more sharing options | View more sharing options |
| Share on LinkedIn | Share on LinkedIn |
| Share on Pinterest | Share on Pinterest |
| Share on Google+ | Share on Google+ |
| Share on WhatsApp | Share on WhatsApp |
| Share on Messenger | Share on Messenger |
| Close | Close |
| The Conservative party is planning to debate an issue it has put off for five years in four hours this week: what sort of economy does it want to see after Brexit? | The Conservative party is planning to debate an issue it has put off for five years in four hours this week: what sort of economy does it want to see after Brexit? |
| Cabinet subcommittee meetings scheduled for Wednesday and Thursday are to discuss what negotiating objectives the government will take into the next stage of exit negotiations. | Cabinet subcommittee meetings scheduled for Wednesday and Thursday are to discuss what negotiating objectives the government will take into the next stage of exit negotiations. |
| In particular, ministers are split over proposals from some UK officials to soften the pain of departure by seeking an extensive new customs union with the EU. Opponents such as Boris Johnson would prefer to keep maximum flexibility to strike new trade deals outside Europe instead. | In particular, ministers are split over proposals from some UK officials to soften the pain of departure by seeking an extensive new customs union with the EU. Opponents such as Boris Johnson would prefer to keep maximum flexibility to strike new trade deals outside Europe instead. |
| The already complex issue has become freighted with extra significance because until now it has been steadfast government policy to argue that there is no need to make a choice. Britain could have “frictionless” trade and set its own independent customs and trade policy, the prime minister insisted in her Lancaster House speech a year ago. | The already complex issue has become freighted with extra significance because until now it has been steadfast government policy to argue that there is no need to make a choice. Britain could have “frictionless” trade and set its own independent customs and trade policy, the prime minister insisted in her Lancaster House speech a year ago. |
| Policy papers published in the summer refined this argument a little, but only as a choice between two alternatives that the rest of Europe dismissed as unrealistic. Britain proposed that it would either strike a new “customs partnership with the EU” in which other members trusted the UK to apply tariffs on goods bound for their market. Alternatively, there would be a “highly streamlined customs arrangement,” which used technology to make border checks all but invisible. Neither was seen as credible outside Downing Street. | Policy papers published in the summer refined this argument a little, but only as a choice between two alternatives that the rest of Europe dismissed as unrealistic. Britain proposed that it would either strike a new “customs partnership with the EU” in which other members trusted the UK to apply tariffs on goods bound for their market. Alternatively, there would be a “highly streamlined customs arrangement,” which used technology to make border checks all but invisible. Neither was seen as credible outside Downing Street. |
| Instead, the government, the CBI (and perhaps the Labour party too) are now considering a third option, one in which the UK would leave the existing EU customs union but strike a very similar new customs union deal to cover trade in goods with it. This would leave the UK much like Turkey is today: outside the single market, but able to stay within integrated supply chains for crucial industries like car-making. | Instead, the government, the CBI (and perhaps the Labour party too) are now considering a third option, one in which the UK would leave the existing EU customs union but strike a very similar new customs union deal to cover trade in goods with it. This would leave the UK much like Turkey is today: outside the single market, but able to stay within integrated supply chains for crucial industries like car-making. |
| While this theoretically leaves open the ability to strike independent trade deals with the rest of the world, particularly for services, there would be major limits to Britain’s room for manoeuvre. As Turkey has found, if other countries know they can already access your market via the customs-free EU border, they are unlikely to take terribly seriously your ability to diverge from existing tariff rates. | While this theoretically leaves open the ability to strike independent trade deals with the rest of the world, particularly for services, there would be major limits to Britain’s room for manoeuvre. As Turkey has found, if other countries know they can already access your market via the customs-free EU border, they are unlikely to take terribly seriously your ability to diverge from existing tariff rates. |
| The row over customs, therefore, presents the first real fork in the road for Theresa May’s Brexit policy. Does she abandon the raison d’être of Liam Fox’s department for international trade and settle for a world in which future British trade policy is largely determined by Brussels? Or does she ignore the warnings of business and put cross-border trade with our biggest market at risk in pursuit of so-far unproved gains to be made in Asian and US markets? | The row over customs, therefore, presents the first real fork in the road for Theresa May’s Brexit policy. Does she abandon the raison d’être of Liam Fox’s department for international trade and settle for a world in which future British trade policy is largely determined by Brussels? Or does she ignore the warnings of business and put cross-border trade with our biggest market at risk in pursuit of so-far unproved gains to be made in Asian and US markets? |
| To make matters harder for those who favour a swashbuckling future outside Europe, the Treasury has conducted economic modelling which suggests that the opportunities for dramatically boosting trade with far-flung markets are far smaller than what is at stake locally. | To make matters harder for those who favour a swashbuckling future outside Europe, the Treasury has conducted economic modelling which suggests that the opportunities for dramatically boosting trade with far-flung markets are far smaller than what is at stake locally. |
| The only way to argue against such analysis is to adopt the position taken by extreme free-traders such as Jacob Rees-Mogg. In this vision, Britain not only seeks to lower the few remaining trade barriers for manufactured goods but also dramatically throws open its doors to all-comers in agriculture and commodities too. Do not worry about the Chinese dumping subsidised steel or the Brazilians flooding our supermarkets with bargain basement food, they say; the benefit of lower costs for consumers will compensate for any collapse in British farming or steel. | The only way to argue against such analysis is to adopt the position taken by extreme free-traders such as Jacob Rees-Mogg. In this vision, Britain not only seeks to lower the few remaining trade barriers for manufactured goods but also dramatically throws open its doors to all-comers in agriculture and commodities too. Do not worry about the Chinese dumping subsidised steel or the Brazilians flooding our supermarkets with bargain basement food, they say; the benefit of lower costs for consumers will compensate for any collapse in British farming or steel. |
| Even instinctive free-marketers like Michael Gove blanch at such a prospect, but Britain is now at just such a turning point. It would be a Brexit that would decimate the very parts of the country that voted for it, but it is the only one that makes sense for those who want to take back control. | Even instinctive free-marketers like Michael Gove blanch at such a prospect, but Britain is now at just such a turning point. It would be a Brexit that would decimate the very parts of the country that voted for it, but it is the only one that makes sense for those who want to take back control. |
| Trade policy | Trade policy |
| Brexit | Brexit |
| Foreign policy | Foreign policy |
| Europe | Europe |
| European Union | European Union |
| Economic policy | Economic policy |
| analysis | analysis |
| Share on Facebook | Share on Facebook |
| Share on Twitter | Share on Twitter |
| Share via Email | Share via Email |
| Share on LinkedIn | Share on LinkedIn |
| Share on Pinterest | Share on Pinterest |
| Share on Google+ | Share on Google+ |
| Share on WhatsApp | Share on WhatsApp |
| Share on Messenger | Share on Messenger |
| Reuse this content | Reuse this content |