Wednesday, 28 February 2018

The race to the bottom

It is right that the government and opposition parties should be competing with each other to offer alternative views of the future.  But that doesn’t make it sensible for them to compete to see who can come up with the most inane ideas about borders and customs union.  In a tight race this week to see who could say the silliest thing on the issue, Corbyn’s claim that we could be part of a customs union in which the UK could set its own external tariffs was narrowly pipped by Johnson’s claim that the whole border issue is as simple as recording the registration numbers of vehicles crossing it.  Neither show much understanding of the question.
What the Government has failed to explain to the satisfaction of just about anyone so far is why it is so important that the UK should be able to negotiate its own trade deals rather than relying on the 60 or so trade deals which the EU already has in place and the new deals which it is already pursuing.  Why duplicate or compete with that, just to put a different flag on the agreement?  In fairness to Corbyn and Labour, as I understood what Corbyn and his supporters to be saying this week, the reason that they want to be able to do that is because they feel that the EU has been discriminatory against poorer countries in its current tariff structures.  If true, that’s a fair point, and a reasonable basis for seeking change.  The problem with Labour’s position is that they seem to believe that they can both stay within a single tariff regime with the rest of the EU and at the same time adjust the UK’s tariffs with the countries concerned.
If we use a few simple figures to illustrate the point, what they are arguing in essence is that their (new, improved, bespoke) customs union can impose a common external tariff of, say 20%, and that the UK can then negotiate separate deals to reduce that tariff to say 10% (or even 0%) for those poorer countries to help them to improve their economies.  In principle, that’s simple enough – provided that those imported goods then stay inside the UK and are not transported elsewhere with the customs union.  But the point of the customs union is that goods from one member state can flow freely to all the others.  How would one prevent goods from being imported to, say, Belfast with no tariff and then transported by lorry to Dublin where the common external tariff of 20% applies, without introducing the sort of hard border which Labour say their proposal is designed to obviate? 
The whole point of a customs union is that it allows goods to flow across the ‘internal’ borders of that union without requiring any tariffs; Labour’s proposal would seem to undermine that completely.  Their fraternal support for the poor whose goods are being shut out of the EU is well-intentioned but, assuming the truth of the claim, what is the best way of seeking change?  Is it by changing the EU’s trade policies to allow those poorer countries better trade access to the whole EU market of 500 million, or is it by negotiating UK specific deals which only allow access to the UK market of 60 million? 
Noting the registration details of vehicles crossing the border with no clue as to who or what is inside them was the even sillier response from the Foreign Secretary who seems not to comprehend the difference between a county border and an international one.  His proposal would certainly provide an electronic list of which vehicles are in the UK at any time and which are not.  But it would tell us nothing at all about who or what was in the vehicles.  Obviously ‘taking control of our borders’ is rather less important to him than he said it was.

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