Britain’s Brexit wish list is slowly being filled out. Today, the government sets out its plans for the temporary customs union it wants with the EU after Britain leaves in 2019. Brexit secretary David Davis says the aim for this new relationship is for it to be as ‘close as we can to the current arrangement’. This will please the likes of Philip Hammond and the Times are painting this proposal as a victory for the Chancellor over Liam Fox in the ongoing Cabinet tussle. It will also placate businesses eager to avoid a cliff-edge.
As ever with Brexit negotiations, not everyone will be entirely happy. David Davis was keen to emphasis on the Today programme that the interim plans will be for two years or less. This is a nod to those who are worried that a transition period could be anything but – resulting in a limbo that drags on for longer than intended. This won’t be the case, say ministers, who point out that while some things will stay the same after 2019, not everything will. One of the key proposals to emerge from the government’s plan today is that switching to this new customs union won’t stop Britain negotiating its own trade deals after 2019. Yet it will stop Britain putting pen to paper on these deals. It also seems likely that the EU will have something to say on this part of the plan. The Brexit secretary might have been adamant that there is nothing to stop the UK negotiating away come 2019; the EU might not agree.
Of course, it’s true that a smooth transition is in the EU’s interests. The customs union largely affects the passage of goods rather than services. With the continent running a £90bn goods trade surplus with the UK in 2015, Davis has a point when he says other European countries would be harmed by a lack of arrangement coming into place when the Article 50 clock stops ticking. Britain’s negotiating tactic over the coming months will be to stick to this line.
While Britain does have this card to play, Davis already hinted that the UK might be willing to go further and pay up to remain in the customs union for the transition period. When he was asked about forking out to gain access, he refused to rule anything out. This is unlikely to warm the hearts of Brexiteers.