Brexit update: Is leaving the EU Customs Union a good idea?
In the recent Brexit transition process, the UK government announced that it plans to leave the EU Customs Union, in favour of a preferred customs agreement, which will allow the UK to strike trade deals with countries outside the EU. However, will this decision be beneficial for the UK in the long run?
The European Union Customs Union (EUCU) allows participating member states of the European Union to have no levied ‘custom duties’ upon any goods traveling within the customs union. This means that member states can impose a ‘common external tariff’ on all goods entering the union, in which tariff rates can be set on all imports into the EU, for all countries outside the union.
However, with plans to leave the EUCU following from the UK’s exit from the EU in March 2019, this could become problematic for the ongoing relations between the EU and UK, as it is predictable that ties between the EU and UK could be severed further, post Brexit.
Therefore, is leaving the EUCU really a good decision for the national interests of the UK?
The UK government claims that “it is not our policy to be within a customs union”, but how much will the UK economy be affected, by not being a part of the EUCU at all? This is particularly as Michel Barnier (pictured above) claims that trade barriers will be “unavoidable”, following from the UK’s exist from the EUCU.
Furthermore, decisions made during the Brexit transition should also focus upon alternative ongoing developments globally that may impact trade – such as the uprising of Bitcoin and its possible impact upon trade worldwide.
Thus, only time will tell as to what extent the UK has made a right decision about leaving the EUCU, as part of the ongoing Brexit negotiations continue.
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Author: Portia Vincent-Kirby