, 18 tweets, 6 min read Read on Twitter
#WithdrawalAgreement In the Withdrawal Agreement, the UK agrees to develop a long term 'economic partnership' with the EU with a customs union similar to the EU-Turkey CU. That is, we would be forced to align our tariffs with EU tariffs. We would have no say in the negotiation of
new EU FTAs. The Commission would of course be negotiating on behalf of EU member states, not the UK. Moreover we would have no guarantee that the third country would agree an FTA with us also. It is the worse of all worlds.
The government is claiming that we will be able to strike our own trade deals in the future, but they are lying, so far as I can see. In the Northern Ireland Protocol preamble, the UK agrees to have as an objective for the 'future relationship'
'ambitious customs arrangements that build on the single customs
territory provided for in this Protocol' assets.publishing.service.gov.uk/government/upl… :
So what is the 'single customs territory' of the NI Protocol, which the future relationship will 'build on'? Article 6 defines it as encompassing both the EU and the UK:
Article 6 also states that the rules of this single customs territory are to be found in Annex 2 of the Protocol:
So what do we find in Annex 2? For trade with third countries, Article 3 states that the UK has to 'align' its tariffs with the EU's tariffs:
In particular (Article 3(2)) the UK must 'under no circumstances' apply tariffs lower than the EU tariffs to goods from any third country:
So this ignominious arrangement is what the future UK-EU would 'build on', if we were to be so foolish as to ratify the Withdrawal Agreement. The point is made even clearer in the Political Declaration at paragraph 23, where it is observed that the single customs territory of the
NI Protocol 'obviates the need for rules of origin'. FTAs normally do require rules of origin. If A has FTAs with both B and C, but B doesn't have an FTA with C, then C's exporters to B could potentially avoid tariffs by routing their goods via A. Hence the rules to prevent
tariff free exports from A to B of goods that originated mainly in C. The only way to obviate the need for such rules is to ensure that A and B have the same tariffs on goods entering from third countries. This is one of the two features that define a GATT customs union - see
GATT 1986 Article 24(8)(a) wto.org/english/docs_e… - and a(ii) for this aspect of it:
a(i) provides for zero tariffs within the 'single customs territory', it being noteworthy that this term used in connection with a GATT customs union is the same as that used in the Withdrawal Agreement in connection with the future UK-EU relationship.
How then can the government possibly say that we will be free to make our own trade deals in the future relationship? I think the answer must be that they are relying on their Facilitated Customs Arrangement proposal, in which the UK levies tariffs at EU levels, but then allows
the payment to be partially or fully recouped if the good is destined for the UK. Professor Alan Winters of the UK Trade Policy Observatory has called this the Fantastically Complicated Alternative blogs.sussex.ac.uk/uktpo/2018/07/… In theory this would allow us to set our own tariffs.
But I am not aware of anyone outside the UK government who considers it to be workable. The new Instrument added to the Withdrawal Agreement may provide that each party has to take proposals 'into consideration' assets.publishing.service.gov.uk/government/upl…
but there can be no reasonable doubt that, faced with the two alternatives of a normal customs union or what the UK itself called an 'unprecedented' approach which 'could be challenging to implement' assets.publishing.service.gov.uk/government/upl…, the EU would insist on the former.
It seems to follow that, to all intents and purpose, ratifying the Withdrawal Agreement would trap the UK into a Turkey type customs union with the EU in the long term. Would this be 'taking back control'?
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