Philip Hammond refuses to rule out a customs union with the EU after Brexit

Chancellor Philip Hammond leaves Downing Street

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Chancellor Philip Hammond leaves Downing Street
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Reuters/Toby Melville

  • Hammond refuses to rule out UK staying in some form of customs union with the EU after Brexit.
  • The chancellor was asked by Treasury Committee chair Nicky Morgan to do so in a letter.
  • He said that Britain will seek “a new customs arrangement with the EU that facilitates the freest trade in goods possible between the UK and EU.”

LONDON – Chancellor Philip Hammond refused to rule out the possibility that the UK will remain in some sort of customs union with the European Union once Brexit is complete.

Responding to a letter from Nicky Morgan, the Tory chair of the House of Commons’ influential Treasury Select Committee, Hammond acknowledged that the UK is set to leave the existing Customs Union it has with the bloc, but stopped short of ruling out any participation at all in such a union.

Britain will seek “a new customs arrangement with the EU that facilitates the freest trade in goods possible between the UK and EU,” he told Morgan, adding that such an arrangement would allow “us to forge new trade relationships with our partners in Europe and around the world.”

In response to Hammond’s letter, Morgan said: It was widely thought that being in a long-term customs union with the EU had been ruled out by the Government. But the Chancellor’s letter confirms that this is not the case.

“It is vital that the Cabinet reach agreement on these central questions about the UK’s future relationship with the EU, as a matter of urgency.”

The Customs Union is a central part of the EU and allows member states trade freely with each other, agreeing to charge the same tariff on imports from outside of the bloc.

Countries importing goods into the EU pay the same tariff regardless of which member states they are importing to. Crucially, members of the Customs Union cannot negotiate their own trade deals elsewhere in the world, as they are tied to the tariff arrangements of the 28-nation bloc.

The European Union’s negotiators have been clear that the UK cannot keep the benefits of being part of the Customs Union, without actually staying within the current Customs Union.