A key issue from a trade perspective will be whether or not the UK stays in the EU customs union when it leaves the European Union (EU). The customs union is an important element of the EU Single Market. Under its rules, the EU operates as a trade bloc, operating common external tariffs and customs barriers, and negotiating trade deals as one. As a member of the customs union, the UK is not allowed to negotiate other bilateral trade deals – which is why Liam Fox has argued that it needs to leave. What would leaving the customs union mean for the UK? On the face of it, customs checks at EU borders, including at the border between Northern Ireland and the Republic of Ireland – something that does not seem to be compatible with Theresa May’s comments about ensuring Brexit works for Northern Ireland. Another implication is that the UK will no longer benefit from the EU’s 56 free trade agreements (FTAs), which provide better access to markets outside of the EU, such as Korea, Mexico and Chile. This may mean that UK exporters face higher tariffs and other trade barriers in these markets. Of course, there are other […]

Original source – Institute for Government

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