Customs and Borders

Robert Courts Excerpts

Thursday 26th April 2018 Commons Chamber

[Robert Courts (Witney) (Con)]

It is a pleasure to speak in this important debate. Our trading arrangements are of great importance to constituencies and country alike. It is critical that we approach the matter in the spirit of the kind of country that we want to be, and the opportunities that we want to seize. I want this country to have the freedom to seize opportunities, rather than being tied as closely as possible to the EU simply because we are afraid of the future.

When we discuss this matter—it has been raised by others, from all parts of the House—it is critical to understand exactly what a customs union is. As has happened during the debate and, indeed, in the motion, it is often conflated with a free trade area. The two things are often lumped together, but they operate differently. A free trade area achieves reduced or zero tariffs on trade between its members. It is possible to have free trade with the EU from outside the customs union, as Norway and Switzerland do. The motion suggests that being in the, or a, customs union would automatically include frictionless trade between the UK and the EU, and that it would solve the Irish border issue, but that would not automatically be the case. The key to enabling frictionless trade and solving the Irish border issue is a comprehensive free trade agreement that eliminates tariffs, with mutual recognition of standards and the use of new technologies. That is exactly what the Government’s policy is intended to achieve.

To leave the European Union but to remain in the customs union would be the worst of all worlds. It would mean surrendering, subject to whatever agreement is subsequently reached, 100% of our trade policy to Brussels and having zero say on that policy. We would have less say than we do now. I do not see how that is compatible with the referendum, however one voted, and I do not see how it is compatible with this country’s best interests. When we look at the effect of the customs union, I suggest that we can do much better outside it than we can in it.

Britain, which is by nature and instinct a globally trading nation, has always been disproportionately penalised by membership of the customs union. For most of our membership we were the only state—or one of only two—to export more outside the EU than to it. That phased application of the common external tariff in the 1970s hit British consumers and Commonwealth exporters badly, and although there have been improvements, our trade remains distorted. The EU currently has no free trade agreement with the world’s largest economy, the USA, or with rising giants such as India, or with long-standing British allies such as Australia. Where free trade agreements are in place, they are often limited in scope.

In my last 30 seconds or so, I will briefly consider Turkey. I know there is an issue as to what agreement is involved, but Turkey is required to apply EU product standards to its domestic economy, accept the ECJ in those areas, but have no say in the EU’s trade negotiations with third countries. When the EU signs free trade agreements with third countries, Turkey must allow full access to its internal market with no reciprocal guarantee. I do not see how we should seek to emulate that model in this country.

[Several hon. Members rose—]