- REUTERS/Hannah McKay
- Liam Fox says Britain cannot be in a customs union with the EU after Brexit.
- Trade Secretary Fox warns Theresa May against a customs union deal amid reports that the government is considering staying wedded to EU customs rules after Brexit.
- The prime minister has kept the door open for a new customs deal with the EU.
LONDON – Liam Fox has warned Prime Minister Theresa May that Britain should not stay in a customs union with the European Union after Brexit amid reports that officials are strongly considering it as an option.
In another sign of how Brexit threatens Cabinet unity, Fox, the International Trade Secretary, said Britain could only “take control” of trade and customs by striking new trade deals which it can’t sign under EU rules.
Prime Minister May has said that Britain leave the customs union in 2019 but continue under its rules during a transition period lasting around two-years.
The customs union provides tariff and barrier free trade between EU member states and applies a common external tariff to trade with non-members (i.e rest of the world.)
Brexiteers like Fox oppose the customs union as members are under EU rules unable to sign their own trade agreements with countries around the world.
The government is currently looking into whether Britain can enter a customs union with the EU after transition in order to minimise disruption to trade and go some way to solving the tricky issue of the Irish border, the FT reports.
However, Fox told Bloomberg news staying in a customs union would not be “compatible” with the Britain’s post-Brexit independent trading policy, as set out in many of May’s speeches.
“It’s very difficult to see how being in a customs union is compatible with having an independent trade policy because we would therefore be dependent on what the EU negotiated in terms of its trading policies and we’d be following behind that,” Fox said.
“We have to be outside of that to take advantage of those growing markets. One of the reasons we are leaving the EU is to take control and that’s not possible with a common external tariff.”
May is coming under increasing pressure from competing wings of party to satisfy their demands on Brexit.
Brexiteers like Fox advocate a clean break from EU insitutions while Cabinet members like Chancellor Philip Hammond and Home Secretary Amber Rudd want to stay closely wedded to Brussels after Britain’s exit.
A Brexit impact assessment leaked to the BuzzFeed earlier this week that found Britain will be financially worse off outside the EU under any modelled scenario.
Hilary Benn, chair of the parliamentary Brexit committee, told BI last month that the government’s decision to make leaving the customs union its policy without first assessing the impact of doing so as “extraordinary.”