Conservative response to Jeremy Corbyn’s customs union speech

Today, Jeremy Corbyn confirmed that Labour are now taking a position that will mean the UK cannot have an independent trade policy after Brexit, meaning we would be unable to sign comprehensive trade deals around the globe.

Responding, Liam Fox MP, Secretary of State for International Trade, said: 

“This is a cynical attempt by Labour to try and frustrate the Brexit process and play politics with our country’s future – all the while, betraying millions of Labour voters. 

“Labour’s confused policy would be bad for jobs and wages, it would leave us unable to sign up to comprehensive free trade deals, and it doesn’t respect the result of the referendum.

“This is another broken promise by Labour. Only the Conservatives are getting on with delivering what British people voted for, taking back control of our laws, borders and money.”

ENDS

Notes to Editors

Today, Jeremy Corbyn committed Labour to staying in a customs union. ‘During the transition period, Labour would seek to remain in a customs union with the EU and within the single market. That means we would abide by the existing rules of both… We have long argued that a customs union is a viable option for the final deal. So Labour would seek to negotiate a new comprehensive UK-EU customs union to ensure that there are no tariffs with Europe and to help avoid any need for a hard border in Northern Ireland’ (Labour Press, 26 February 2018, link).

Whilst we are seeking frictionless trade without being bound by the rules of the customs union, Labour’s position would not deliver the change the British peopled voted for, and has four key flaws:

Problem 1: No control.

• ·         The common commercial policy and common external tariff are set by the European Union, of which we will no long have membership, and we would therefore not have control over our trade policy.

• ·         Barry Gardiner has said that ‘in voting to leave the EU the British people voted to leave both the single market and the customs union’ (Hansard, 5 September 2016, Col. 48WH, link).

Problem 2: Without control over our tariffs we would be unable to negotiate or sign comprehensive trade deals with third countries.

• ·         This contradicts Labour's 2017 Manifesto which commits to 'work with global trading partners to develop “best-in-class” free trade and investment agreements that remove trade barriers' (Labour Manifesto 2017, p.30, link).

• ·         Emily Thornberry said Labour’s plan for a customs union ‘will look pretty much like the current customs union’, which means we can’t negotiate trade deals with countries around the world (LBC, 22 February 2018, archived).

• ·         Barry Gardiner said that retaining membership of a customs union would be ‘deeply unattractive’ because it would stop us negotiating our own trade deals: ‘As a transitional phase, a customs union agreement might be thought to have some merit. However, as an end point it is deeply unattractive. It would preclude us from making our own independent trade agreements with our five largest export markets outside the EU’ (The Guardian, 24 July 2017, link).

Problem 3: Unfair, unequal and with no chance of anything better: the EU could let other countries sell more into the UK, but the UK couldn’t sell more of our products to them.

• ·         As with Turkey, the EU would be able to offer access to the UK market in their trade negotiations with third countries, but we would get no access to those third countries’ markets. 

• ·         Barry Gardiner, Shadow Secretary of State for International Trade, described this as a ‘disaster’. ‘So the EU could do a deal with another country, let’s say America, which we would be bound by in the UK, we would have to accept the liberalisation of our markets… We would be bound to try to negotiate it but why would America give us that access when it’s got all the liberalisation of our markets that it wants. It’s a disaster’ (Labour List, 24 July 2017, link).

• ·         The CBI have also highlighted why this is no solution at all, saying ‘it would not be in the UK’s interest to be a silent partner’ (CBI Case studies, link).

Problem 4: EU control over UK trade remedies.

• ·         The common commercial policy gives the EU exclusive competence in the area of trade remedies for tackling anti-competitive practices. This means that inside a customs union the UK would not be able to take action to take action on steel dumping, or anti-competitive state subsidies.

• ·         This contradicts Labour’s Manifesto which says that: ‘We will work with other WTO members to end the dumping of state-subsidised goods on our markets... Labour will develop the full range of trade remedies necessary to support key sectors affected by these unfair practices’ (Labour Manifesto 2017, p.30, link).

• ·         It is also something demanded by Labour’s union paymasters. In May 2017 Unite, GMB and Community said that ‘the next Parliament must legislate to provide a legal framework for the UK’s future trade remedies and the next Government will be responsible for determining the UK’s post-Brexit ‘trade philosophy’...Our organisations are calling on politicians to commit to strong trade remedies as part of an industrial strategy to do just that, UK manufacturing deserves no less’. (British Ceramic Confederation, 3 May 2017, link).