- Trade secretary Liam Fox today says Labour’s customs union policy would represent “a complete sell out of Britain’s national interests.”
- He said it would leave the UK with “one arm tied behind our back” in trade talks.
- Jeremy Corbyn wants to negotiate a UK-EU customs union in order to protect tariff-free trade and the invisible border between Northern Ireland and the Republic.
- Business groups welcomed Corbyn’s announcement.
- Fox delivers his speech hours after his former trade chief compared Brexit to swapping a “three-course dinner” for “a packet of crisps.”
LONDON – Trade Secretary Liam Fox said today that Labour’s customs union policy would represent “a complete sell out of Britain’s national interests” and leave the UK with “one arm tied behind our back” in trade talks.
In a speech at Bloomberg in the City of London, Conservative minister Fox said remaining in a customs union with the EU after Brexit would make Britain “rule takers” and leave the country in “a worse position than we are today.”
The speech came a day after Labour leader Jeremy Corbyn called for a “new and comprehensive” UK-EU customs union to secure tariff-free trade once Britain leaves the bloc.
The shift in Labour’s Brexit policy – which would limit Britain’s ability to strike independent trade deals – has the support of rebel Tories, meaning it could secure a majority in the Commons and force the prime minister to negotiate with the EU for a customs union membership.
Fox, a vocal Brexiteer, claimed the policy would limit the UK’s ability to trade with fast-growing economies in future and hamper the development of poorer countries.
“The pattern of our trade is changing,” he said. “Fifty-seven per cent of Britain’s exports of goods and services are now to outside the EU compared with only 44% in 2005.”
He said a customs union would mean “we would have to accept EU trade rules without any say in how they were made, handing Brussels considerable control of the UK’s external trade policy,” and “limit our ability to develop our trade and development policies that would offer new ways for the world’s poorest nations to trade their way out of poverty.”
“The inevitable price of trying to negotiate with one arm tied behind our back is that we would become less attractive to potential trade partners and forfeit many of the opportunities that would otherwise be available to us,” he said.
Fox claimed that keeping Britain in a customs union with the EU would be a “sell-out” of the national interest and “betrayal of the voters in the EU referendum.”
The minister said Britain needed the ability to exercise a “fully independent trade policy” once it has left the EU.
“We cannot let the patterns and practices of the past constrain the opportunities of the future,” he said.
“The wider benefits of a liberal trade policy are shared by consumers and households across the country by providing a greater variety of goods at a lower price.”
He also called for a “bespoke” trading relationship with the EU and rejected the possibility of replicating an off-the-shelf model. “We are not Canada, or Noway, or Switzerland. We are Britain,” he said.
A standard customs union arrangement with the EU, as proposed by Corbyn on Monday, would see Brussels negotiate new trade deals on behalf of member states and bar countries from negotiating independent trade agreements, which Brexiteers are vigorously opposed to.
Corbyn insisted yesterday that Labour would seek a deal which gave Britain “a say in future trade deals” negotiated on its behalf, although he failed to clarify whether he’d accept a customs union which didn’t give Britain the power to veto new trade deals.
Labour’s position drew rare support from business groups. The Confederation for British Industry said the policy would “grow trade without accepting freedom of movement or payments to the EU.”
Fox’s speech also came just hours after Sir Martin Donnelly, who was the permanent secretary at the Department of International Trade until last year, claimed that attempting to replace the UK’s current trading relationship with the EU with new free trade deals elsewhere was like “giving up a three-course meal now for the promise of a packet of crisps in the future.”
Donnelly pointed out that three-fifths of the UK’s current trade is done with the EU and other nations the bloc has preferential trade deals with, and added that hoping to get a better deal with countries further afield was like wishing for a “fairy godmother.”
In a speech tomorrow, Donnelly will also rubbish Theresa May’s claim that Britain can retain the benefits of the single market and customs union after it has left.
“Having our cake and eating it is not an option in the real world; ‘frictionless trade’ is a phrase without legal content,” Donnelly will say.
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