ChatterBank0 min ago
Customs Union
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Ok, excuse me for being a bit thick, but could somebody explain to me exactly what 'The Customs Union' is
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The EU customs union is the arrangement whereby
(a) goods can be freely moved between any two countries without the imposition of any import taxes by the receiving country ; and
(b) where all the countries agree to charge the same rates of import duty upon goods brought in from outside the union. (e.g. France, Germany, the UK, Italy, etc must all charge the same rates of import taxes upon goods imported from the USA or China, with those rates being set in Brussels, rather than by national governments)
(a) goods can be freely moved between any two countries without the imposition of any import taxes by the receiving country ; and
(b) where all the countries agree to charge the same rates of import duty upon goods brought in from outside the union. (e.g. France, Germany, the UK, Italy, etc must all charge the same rates of import taxes upon goods imported from the USA or China, with those rates being set in Brussels, rather than by national governments)
Why it matters . . .
1. If we move to a position whereby the UK is taxing everything arriving from France at Dover, and similarly France is taxing everything arriving from the UK at Calais, the system won't work if goods can be brought into, or exported out of, a backdoor route across the Irish border. So if there's no customs union there would need to be a 'hard' border (i.e. with a fence or similar) between Northern Ireland and the Republic, with customs posts on either side to check what everyone has got in their cars. Given that some roads wind in and out of the two countries every few miles, and there are even some homes which actually straddle the border, that wouldn't be easy to manage (and it certainly wouldn't be popular with those people whose jobs and other commitments mean that they have to cross the border several times per day).
2. If, say, Japanese car firms make their cars in Japan, they'll face hefty import tariffs if they want to sell them in the EU (making teir models uncompetitive). So some companies have opened factories in the UK in order to be able to supply cars to France, Germany, etc, without having to pay import tariffs. If the customs union goes then those Japanese car firms will have to pay import taxes to get their cars into the rest of the EU, meaning that they might well decide to shift their factories to the other side of the channel (causing big job losses in the areas where they'd been making their cars here) in order to avoid paying those taxes.
1. If we move to a position whereby the UK is taxing everything arriving from France at Dover, and similarly France is taxing everything arriving from the UK at Calais, the system won't work if goods can be brought into, or exported out of, a backdoor route across the Irish border. So if there's no customs union there would need to be a 'hard' border (i.e. with a fence or similar) between Northern Ireland and the Republic, with customs posts on either side to check what everyone has got in their cars. Given that some roads wind in and out of the two countries every few miles, and there are even some homes which actually straddle the border, that wouldn't be easy to manage (and it certainly wouldn't be popular with those people whose jobs and other commitments mean that they have to cross the border several times per day).
2. If, say, Japanese car firms make their cars in Japan, they'll face hefty import tariffs if they want to sell them in the EU (making teir models uncompetitive). So some companies have opened factories in the UK in order to be able to supply cars to France, Germany, etc, without having to pay import tariffs. If the customs union goes then those Japanese car firms will have to pay import taxes to get their cars into the rest of the EU, meaning that they might well decide to shift their factories to the other side of the channel (causing big job losses in the areas where they'd been making their cars here) in order to avoid paying those taxes.
The soft border would be less of a problem than claimed. Smuggling aside, paperwork should show source, destination, and whether tax is payable. No need to stop and do so at a hard border. There could even be concessions, if agreed, for tax to be waived if the product isn't quickly moved on to a different country in a union nation. Need not be off the discussion table.
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