Today’s Times reports Philip Hammond is again scheming to keep Britain in the customs union. A senior Whitehall source tells Guido that, back before the government announced it would take Britain out of the customs union in January, Hammond met with Theresa May and David Davis and lobbied them to keep the UK inside. He was told Britain had to leave the customs union to respect the referendum result. (The ability to strike free trade deals with other nations – impossible inside the customs union – being a key aspect of Brexit.) Hammond accepted this publicly:
“The decision to leave the European Union has changed the game. It’s clear that we can’t stay in the customs union and wasting a lot of political capital arguing about that will not be fruitful.”
The customs union is a protectionist barrier to free trade with the 162 countries outside the EU. Don’t fall for the hype that it reduces trade barriers. Garlic has a 200% external tariff to protect French farmers, some US jeans face a 26% tariff, shoes face 17% tariffs to protect Italian cobblers. Some agricultural products, e.g. beef and dairy, have very substantial tariff rates, 54 dairy products alone have tariff rates of more than 75%. The customs union only liberalises internal trade within the EU.
We had this debate during the referendum – and leaving the customs union won. The Cabinet had this debate in January – and leaving the customs union won. Yesterday ministers from DexEU and DIT promised Britain would take control of trade policy – that means leaving the customs union. Cabinet agreed. Come on Phil, listen to your own advice and don’t waste time going down the Remoaner road of Hilary Benn and Chuka Umunna…