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IEA responds to Labour party policy on Brexit and customs union

Responding to Jeremy Corbyn’s statement that Labour would back the UK remaining in a permanent customs union with the EU, Mark Littlewood, Director General at the Institute of Economic Affairs said:

“Membership of the customs union is a choice the Government has to make and it is a very straightforward one. Leaving the customs union will allow the UK to pursue its own trade deals; staying in a customs union means there will be no scope for UK trade deals. The former is a far more attractive option.

“Remaining in some form of customs union will make it almost impossible for the UK to make the most of the opportunities Brexit has to offer. It would prevent the UK from reducing barriers to trade with the rest of the world, whether by signing new deals or simply lowering these barriers unilaterally.

“There is no meaningful difference between ‘a’ customs union and ‘the’ Customs Union. Both would require the UK to impose the EU’s common external tariffs (and other barriers) on imports from the rest of the world, and thus prevent the UK from taking back control of trade policy.

“What’s more, a customs union is not the only solution to the challenges that lie ahead. The UK could keep any additional frictions with the EU to a minimum with a new and comprehensive free trade agreement, including alternative customs arrangements.

“While remaining in some form of customs union might have some benefits such as preventing disruptive border checks including in Ireland, and allowing tariff-free trade to continue, forging free trade deals with the ever-growing global economy will be nigh on impossible.”

Notes to editors:

For media enquiries please contact Nerissa Chesterfield, Communications Officer: nchesterfield@iea.org.uk or 0207 799 8920 or 07791 290 268.

To read the IEA Brexit Unit’s briefing on how the UK can do better than the EU’s customs union, published in February 2018, click here.

To read more about the work of the IEA’s Brexit Unit, click here.

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems and seeks to provide analysis in order to improve the public understanding of economics.

The IEA is a registered educational charity and independent of all political parties.