UK government to counter Labour support for Brexit customs union

British Secretary of State for International Trade and President of the Board of Trade Liam Fox leaves after a cabinet meeting at 10 Downing Street in London, Britain, 6 February 2018 [Will Oliver/EPA/EFE]

Britain’s International Trade Secretary Liam Fox will use a speech today (27 February) to criticise staying in a customs union with the EU following Brexit, a day after the opposition Labour Party announced a policy shift in favour of the move.

Fox will argue that remaining in a customs union would limit Britain’s ability to agree future free trade deals and hand Brussels “considerable control of the UK’s external trade policy”, according to advance excerpts of his speech.

“As rule takers, without any say in how the rules were made, we would be in a worse position than we are today,” he will say.

“It would be a complete sell out of Britain’s national interests.”

Fox’s address will come after Labour leader Jeremy Corbyn called yesterday for a new post-Brexit customs union with the EU that could force Prime Minister Theresa May to reverse her stubborn opposition to the idea.

UK's Labour piles pressure on May over Brexit stance

The leader of Britain’s opposition Labour Party, Jeremy Corbyn, will clarify the party’s position on Brexit today (26 February) in a move that could lead to a major parliamentary defeat for Prime Minister Theresa May.

Just days before a keynote speech by May on the future trading relationship with the European Union, Corbyn drew a clear line between Labour’s policy and that of the government.

“Labour would seek to negotiate a new comprehensive UK-EU customs union to ensure that there are no tariffs with Europe,” he said in Coventry, central England.

Corbyn added this would also “help avoid any need whatsoever for a hard border in Northern Ireland”, where the prospect of a return of customs checks has prompted concern about the fragile peace in the province.

Employers suggest Turkish-style UK-EU customs union to solve Brexit impasse

Britain and the European Union could reduce their differences over future trade ties by agreeing a compromise deal that would keep a chunk of British exports within the EU’s customs union after Brexit, a British employers’ group said.

Corbyn aligns with big business

His commitment puts the veteran left-winger in the unusual position of aligning with the Confederation of British Industry, the country’s big business lobby.

Britain is currently part of the EU’s customs union, which has a common external tariff on imports, allowing goods to move freely inside the area.

Fox will argue that maintaining a customs union would prevent Britain from setting the rules in sectors of its economy, handicapping free trade deals with non-EU countries.

“The inevitable price of trying to negotiate with one arm tied behind our back is that we would become less attractive to potential trade partners and forfeit many of the opportunities that would otherwise be available to us,” he will add.

However, Corbyn argued any future EU customs agreement would “need to ensure the UK has a say in future trade deals”, adding Britain should not become a “mere rule-taker”.

He stressed Labour’s priority was protecting people’s jobs and living standards.

Citing the example of integrated supply chains in the car industry, he argued that it “makes no sense” for Britain to turn its back on “tariff-free trading rules that have served us well”.

Labour’s position ups the pressure on May ahead of a major speech on Friday and drew an immediately sharp response from leading eurosceptics in her Conservative party.

“Corbyn’s Brexit plan would leave the UK a colony of the EU — unable to take back control of our borders or our trade policy,” Foreign Secretary Boris Johnson said on Twitter.

Referring to the trade talks in Brussels which are due to start in April, he added that the speech was a “white flag from Labour before talks even begin”.

The UK “will not be joining a customs union”

The prime minister’s spokesman was unequivocal about May’s position, saying: “The government will not be joining a customs union.

“We want to have the freedom to sign our own trade deals and to reach out into the world.”

But a group of Conservative rebel MPs disagree and have tabled an amendment to a draft bill going through parliament calling for a new customs union.

Corbyn made an appeal Monday to “MPs of all parties, prepared to put the people’s interests before ideological fantasies” to join his position.

The Conservatives only have a slim majority in the House of Commons, thanks to support from Northern Ireland’s Democratic Unionists (DUP).

DUP lawmaker Sammy Wilson accused Corbyn of a “blatant attempt to bring down the government”.

Some members of Corbyn’s own party are also unhappy, suggesting that maintaining close ties with the EU is a betrayal of the 2016 vote for Brexit.

“It’s the latest wheeze by the well-oiled machine in this country to undo the referendum,” eurosceptic Labour MP Frank Field told the Daily Telegraph.

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