New, radical customs proposals?
The UK’s two policy papers entitled Future customs arrangements: a future partnership paper and Northern Ireland and Ireland lay out options for customs arrangements for post-Brexit trade as well as matters specific to Ireland.
For trading, the UK put forward two proposals. Under one option, a “new customs partnership” would succeed the current customs arrangements between the UK and the EU, which the UK say would remove the need for a customs border with the EU but still leave it free it to strike new trade deals with other countries. A different regime would apply to goods destined only for the UK market.
Under the second option entitled “a highly streamlined customs arrangement”, technology would help create a streamlined and frictionless customs border between the UK and EU to minimise the impact of Brexit on trade. The UK admits that this is untried and untested. Some critics have said that policing this proposal would mean huge administrative burdens for the UK and EU and would create an incentive for exploitation of the difference between customs, excise and VAT regimes in both jurisdictions.
In terms of the Irish border, like the EU, the UK wants to avoid a hard border, maintain the existing Common Travel Area and uphold the Good Friday Agreement. With the UK insistent that it wants to leave the customs union so that it can forge its own trade agreements with other countries, it is uncertain how a border without physical infrastructure would operate in practice.
Some good news for Ireland is that the UK wants to uphold the Common Transit Convention which means goods would not have to complete a new customs declaration every time they cross a new border.
In terms of agriculture which is a key area for Ireland, no border checks might mean that food safety standards have to be closely aligned between the UK and EU. In response to this the UK said that it will explore an agreement on standard recognition to ensure that there is no requirement for product standard checks at the border.
The paper also proposes that people born in Northern Ireland should continue to have the right to take Irish citizenship and therefore hold EU passports. Ireland and Northern Ireland should also retain the single electricity market that’s currently in place, and gas trading between the mainland UK and the island of Ireland should also continue.
The EU has welcomed the papers saying “We see the UK’s publication of a series of position papers as a positive step towards now really starting phase one of the negotiations. The clock is ticking and this will allow us to make progress” but has reminded the UK that trade talks come after agreement on Northern Ireland, movement of people and the financial bill.