Cabinet split over EU 'customs partnership'

The future of the UK’s trade relationship with the EU has caused friction within the Cabinet, as hardline Brexiteers favouring global trade over a ‘customs partnership’ spoke out against the Prime Minister.

Houses of Parliament at sunset
The UK government’s plan for a ‘customs partnership’ to facilitate free trade with the European Union after Brexit appeared in disarray after Foreign Secretary Boris Johnson branded the idea “crazy”.

Cabinet divided over customs plans

A customs partnership to replace the existing customs union is favoured by Prime Minister Theresa May and several Cabinet colleagues – including Chancellor of the Exchequer Philip Hammond – not only because it would enable the continued free flow of goods but would also solve the problem of achieving an open border between Northern Ireland and the Republic.But hardline Brexiteers in the Cabinet, including Mr Johnson, have set their faces firmly against the idea and want to pursue a policy of pursuing global free trade deals.
In a BBC interview on Sunday, Business Secretary Greg Clark said a new customs partnership with the EU was “still on the table” and was of “huge importance” as he warned about the effect of border checks on thousands of jobs.

Position of UK business organsations

He immediately received the backing Carolyn Fairbairn, director-general of the Confederation of British Industry (CBI), who said, “The single most important Brexit priority for British manufacturers is to protect frictionless trade with the EU. Hundreds of thousands of jobs across the UK depend on it.“We therefore welcome the Secretary of State’s recognition that any customs solution must deliver this goal, with no tariffs or additional border checks, delays or red tape for EU/UK exports and imports, which account for nearly half of all UK trade.“This is a time for pragmatic solutions, not ideology. To protect frictionless trade and ensure no return to a hard border on the island of Ireland, a customs union model based on status quo principles should remain in place unless and until an alternative is ready and workable.”
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Opposition to customs partnerships

However, Mr Johnson told Tuesday’s Daily Mail that a customs partnership was “totally untried and would make it very, very difficult to do free trade deals”.He added, “If you have the new customs partnership, you have a crazy system whereby you end up collecting the tariffs on behalf of the EU at the UK frontier.“If the EU decides to impose punitive tariffs on something the UK wants to bring in cheaply there’s nothing you can do.“That’s not taking back control of your trade policy, it’s not taking back control of your laws, it’s not taking back control of your borders and it’s actually not taking back control of your money either, because tariffs would get paid centrally back to Brussels.”In addition to Mr Johnson, Brexit Secretary David Davis, Environment Secretary Michael Gove, International Trade Secretary Liam Fox, Defence Secretary Gavin Williamson and Home Secretary Sajid Javid were reported to have opposed plans for a customs partnership at last week’s meeting of the Brexit Cabinet sub-committee.Jacob Rees-Mogg, who chairs the European Research Group of Conservative backbench MPs which fiercely opposes any customs tie-up with the EU, branded the partnership proposal as “just membership of the customs union and the single market by another name”.Mr Rees-Mogg told the Daily Telegraph, “Time will tell. Every few weeks it seems the Treasury tries to get an effort to keep us in the customs union going again, usually in cahoots with the EU-funded CBI.“And then it goes away again, because that’s not what’s in the manifesto. Then it comes back once again. The customs partnership seems to be in the longer grass, but the long grass sometimes gets mown.”For related news and features, visit our Brexit section. Find out more about our upcoming Relocate AwardsRelocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Global Mobility Toolkit download factsheets resource centreAccess hundreds of global services and suppliers in our Online DirectoryClick to get to the Relocate Global Online Directory