Joining the EU Customs Union would not help UK importers and exporters with their administrative burdens
Custom Union members cannot easily forge their own trade agreements
23 January 2025 | Author: Simon Sutcliffe
Joining the EU Customs Union would not reduce the administrative burden on UK importers and exporters or herald a new ability to trade freely.
Simon Sutcliffe Customs & Excise Duty Partner said:
Sir Ed Davey voiced support this week for the UK joining the EU Customs Union, but he seems to be misunderstanding the realities of being part of a Customs Union verses the Single Market.
One of the basic premises of Davey’s remarks is that joining the EU Customs Union will lessen the documentary and administrative burden for UK exporters and importers, but this is not the case. UK exporters and importers would still need to submit customs documentation and adhere to or prove required standards of products whether they be manufactured or agricultural goods. Meaning a customs union does not create a frictionless border between its members in the same way that access to the EU Single Market would.
Additionally, the freedom for the UK to forge its own trade agreements and influence EU trade policy would be severely limited. In a Customs Union each member levies the same tariffs and barriers to non-members by way of a common external tariff. Each member is not permitted to forge their own trade agreements, which would put an end to any potential unilateral trade deals with China or America, both large markets it would be costly to ignore.
Davey also seemed to suggest that being a member of the Customs Union would remove issues such as Rules or Origin as these concepts are more relevant to trade agreements. However, proving the origin of products and meeting certain product specific rules are still relevant for members of a Customs Union.
Currently there still exists common customs reliefs and suspensions for items being sent to and from the EU for servicing, repair or being returned that relieve import taxes, but these easements seem to be ignored or often overlooked.
He concluded
Unfortunately, 5 years after the UK left the EU Single Market, common misunderstandings still remain. It is important that politicians ensure they fully understand how customs and duties work before commenting on them to avoid perpetuating these inaccuracies.
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