In which @DanielJHannan says (in the end) that EEA membership would be better than a customs union with the EU. Some thoughts.
1. Hannan is right to point out serious constitutional/democratic deficiencies with a CU. Essentially, the U.K. would be bound by tariffs (and trade remedies such as anti-dumping duty or responses to Trump tariffs) in which it - and Parliament - has no say.
Taxation - even taxation on imports - without representation raises democratic issues. (See Boston harbour in 1773.)
2. The problem with EEA membership as a solution is that *in itself* it reduces, *but does not remove* the need for infrastructure and checks - at both the Irish border (problem for those living in Ireland) and at Channel ports (problem for just in time supply chains).
That’s because - though there are no tariffs between the EEA3/EU save for agri/fish - you need checks to deal with (1) rules of origin (eg manufactures from Hong Kong that enter 🇳🇴 tariff free under the EFTA/ 🇭🇰 FTA but have to pay EU WTO tariffs in the EU) + (2) food and fish.
So to solve the NI and Channel infrastructure/checks problem in the EEA, you need either (i) to tack on a CU to the EEA - and add agri and fish to it or (ii) find a way to avoid infrastructure and checks.
3. Tacking a CU + zero tariffs on agri/fish on to the EEA is in my view doable - but you need to negotiate various derogations from the EFTA Convention and EEA Agreement itself.
(Eg removing the obligation in the EFTA Convention that the U.K. would have to apply to join the EFTA/🇭🇰 FTA - which it couldn’t do in a CU with the EU + some other changes to deal with trade remedies and agri/fish tariffs.)
4. But even in the EEA the democratic problems with a CU remain. Important here to appreciate that the EEA is not regulation without representation.
The EEA3 can influence EU regulation, secure adaptations to it, and ultimately refuse to adopt it (at the price of reduced access). Their parliaments remain ultimately in control.
But those mechanisms couldn’t work for a CU - tariffs and tariff rules have to be identical. No room for reservation/adaptation. And EU tariff rules and rates would have to be directly effective - ie no room for the U.K. Parliament to say “no”.
And there’s no chance of the U.K. being given a veto (no Member State has that).
5. So does the EEA help solve the problems with a CU? I think it does, in three ways: but indirectly.
(i) It deals with a lot of the collateral elements that would need to accompany a CU, such as State aid and commitments on social and environmental standards. Many of these are in the EEA: those problems are solved and in a way that is democratically defensible (see above).
(ii) Because it deals with many elements that make infrastructure and checks necessary at the U.K./EU border necessary, it means that the remaining customs issues become more confined and more potentially soluble with legal, administrative and technical cooperation.
It also, importantly, provides a proper democratic governance framework for NI membership of the single market (it would simply be rolled up into the U.K. EEA membership): such a framework for NI is missing from the EU’s backstop proposal.
(iii) More generally, it provides a framework for regaining the mutual trust between the U.K. and EU that will be needed for legal, administrative and technical cooperation to have any hope of solving the Irish border problem.
6. Returning to @DanielJHannan’s article, the difficulty with his objection to a CU - strong though it is on democratic grounds - is that it leaves the Irish border question unsolved.
And without a CU it is at least in the short to medium term insoluble if NI is to remain in a customs union with GB.
The best one can do - if one has the long run objectives of leaving the CU (on the grounds Hannan sets out), keeping NI in the same customs territory as GB, and avoiding a hard Irish border ...
... is to set up structures that minimise the problem and facilitate a long run solution (which will require new technology and extensive legal and administrative cooperation).
Of the options he sets out, there is a good case that the EEA (+CU initially) framework is the most realistic and acceptable way of achieving that.
