Why Do Labour Mps Want A Customs Union?

[Khandro]

https://moneyweek.com/504533/the-trouble-with-a-customs-union

[Zacs-Master]

Lots of ‘ifs’ ‘coulds’ and ‘mights’ in there. Almost looks like project fear in reverse.

‘but the markets of such third countries would not be open to our exports since we would be outside the EU’
Buhlshiyte.

[jno]

why not try negotiating one and seeing if it's satisfactory?

[dannyk13]

Because it is one of Corbyn's red lines.

[Gromit]

// Why Do Labour Mps Want A Customs Union? //

And from the link
// apparently a favoured option of Jeremy Corbyn’s //

Just a reminder that the Customs Union proposal was introduced by a Conservative MP and not a Labour one. And the proposal failed by 3 votes, indicating that it had all party backing, but not just quite enough.

[New Judge]

//‘but the markets of such third countries would not be open to our exports since we would be outside the EU’
Buhlshiyte.//

Er…not quite the cattle excrement you suggest.

The Good Professor Bogdanor makes a very important point. Being inside the EU’s Customs Union does not make us party to any trade agreements the EU may conclude. It makes us subject to the Union’s tariff arrangements when it comes to imports but does not necessarily allow us to take advantage of the EU’s trade agreements when it comes to exports. The idea of a Customs Union is to protect it members from external competition by “encouraging” consumers to buy goods from within the union (aka taxing the stuff which comes from outside). In this respect the EU’s CU is particularly perverse. For example, no bananas are produced in the EU so there is no opportunity for consumers to buy EU bananas. But the EU imposes a 10.9% tariff on all banana imports. Why should this be? It has no banana industry to protect and the result is that UK consumers are paying 10.9% extra for their bananas, 80% of which is passed directly to Brussels/Strasbourg. So, Zacs, when you next ask how the EU affects people on a daily basis, you can add this to your list which includes light bulbs and weed killer.

Customs Unions are fine if you are content to sub-contract your trade policies to a foreign third party (who may not have your best interests at heart, especially when it has so many economically diverse members). If you want to conduct your own affairs they are not for you. Quite why the Labour Party is so keen to see the UK shackled to one is a little puzzling. If only trade is being considered (which seems to be the be-all-and-end-all of Brexit discussions) then the single thing the UK must do if it does nothing else is to leave the Customs Union. It’s great if you want to trade solely within the EU but the few advantages it bestows are but nothing compared to the disadvantages for companies who seek to trade on a wider basis.

[HBAnorak]

They believe a CU would make it more difficult for future Tory governments to undercut standards on things like holiday and maternity rights, animal welfare etc. I think the single market provides better guarantees in that regard, but it is politically difficult for Labour to support remaining in the single market (EEA in effect) because free movement of people would be retained. It is certainly true that the no deal brigade oppose a customs union because they perceive it as an obstruction to getting rid of employment rights and environmental protection, things they regard as tiresome red tape.

[New Judge]

And the proposal failed by 3 votes, indicating that it had all party backing, but not just quite enough.

That’s not quite correct.

The Customs Union proposal was supported by 230 Labour MPs and 43 others (including 37 Tories). It was opposed by 236 Conservative MPs and 40 others (including ten Labour MPs). I would hardly say this demonstrates “all party support”.

Very true, its proponent was a Tory, but Kenneth Clarke would support a motion for the EU to declare war on the UK if pressed, such is his enchantment with the Union.

[dannyk13]

NJ apparently it was said that they wanted a[i customs union but not [i]the] customs union as it stands.

[New Judge]

"They believe a CU would make it more difficult for future Tory governments to undercut standards on things like holiday and maternity rights, animal welfare etc."

The Customs Union does not bestow those rights. They go hand in hand with the Single Market, not the Customs Union. Turkey is an "associate member" of the EU's Customs Union (a membership that is causing them quite some problems) but I don't believe workers and animals enjoy quite the same rights as those in EU member nations.

[New Judge]

Quite danny. But the principles of a customs unions (whether "a" or "The") are the same. Members forfeit their rights to negotiate their own trade deals and set import tariffs. Otherwise it is not "a" customs union. If Mr Corbyn thinks the EU will negotiate a union which allows tariff-free trade within the EU without forfeiting the UK's control over other aspects of trade he is even more deluded than I thought he was.

[HBAnorak]

Of course the single market regulates standards, but at least a CU can use tariffs to rig the market against competitors with weaker standards. Is it not also the case that a CU is still the only way of avoiding a hard border in Ireland without technological solutions for which there is as yet not even the beginnings of any kind of design/ implementation: we are decades rather than years away from an e-border

[Zacs-Master]

NJ, the statement made that the markets of third countries would not be open to our exports as we would be outside the EU is completely wrong. It is easy, as long as the agreed external tariff is applied. You must have a different definition of bovine excrement to me.
Being in a customs union to secure free trade with the our biggest trading partner (approx 50%) makes complete sense to me.

[dannyk13]

ZM, in a customs union with the EU we can only make trade deals with countries through and with permission of the EU.

[Zacs-Master]

Well, as we were one of the world’s richest economies as well as one of Europe’s, it seemed to work, danny.

[dannyk13]

It will work even better without the EU controlling us.

[Zacs-Master]

I think that’s called wanting to have your cake and eat it.

[dannyk13]

Not at all ZM.

[Zacs-Master]

You seriously think that we’re going to improve our world and European economic rankings by coming out of a preferential tariff / movement of goods agreement with our biggest trade partners?

Yeah. That makes sense, doesn’t it!

[dannyk13]

Actually it does, although it will not happen overnight.

[New Judge]

"...but at least a CU can use tariffs to rig the market against competitors with weaker standards."

No it cannot. The EU trades under WTO rules and these stipulate that members cannot impose discriminatory tariffs If a tariff of 10.9% is imposed on bananas from Trinidad that same tariff must be imposed on bananas from Cuba (or anywhere else).

As far as the Irish Red Herring is concerned, M. Barnier is on record as saying that no hard border is necessary in Ireland (apart from the fact that nobody has any intention of imposing one anyway). The Port of Felixstowe handles some £80bn worth of imported goods every year (more than 25 times more than crosses the Irish border). More than 98% of this traffic is completely unmolested at the port, with customs clearance and tariff collection being achieved by a worldwide digital declaration system called Destin8. Goods are on the road as soon as they are lifted from the ships. No infrastructure is necessary either at the border or anywhere else. Destin8 is principally a maritime system but its operators confirm that it could be easily adapted to cope with the small amount of cargo which crosses the Irish land border. It just needs a bit of application which could have been achieved over the last two years instead of arguing over how much we were to be charged for permission to leave.