LONDON (Reuters) – Britain has dominated out staying in any customs union with the European Union after Brexit, Prime Minister Theresa May’s spokesman mentioned on Monday because the government prepares for a crunch week of Brexit talks.
The extent of any British post-Brexit involvement within the EU’s customs union – which binds members right into a commerce bloc with widespread exterior tariffs – has grow to be a serious challenge of competition inside May’s divided government and Conservative Party.
Membership of the, or a, customs union after Brexit, would stop London from putting commerce offers with international locations exterior the EU in future.
“The key point, as the prime minister has said on many many occasions, is that we need to have our own independent trade policy and be able to strike trade deals with the rest of the world,” May’s spokesman instructed reporters.
“We will be leaving the EU and the customs union and it is not government policy to be members of ‘the’ customs union or ‘a’ customs union.”
He mentioned the official negotiating stance had been set out in a doc printed in August giving: “two possible options and they are: a highly streamlined customs arrangement, and a new customs partnership with the EU.”
The spokesman mentioned Britain was nonetheless taking a look at each choices, and no deadline for a choice on which one to pursue had been set.
With only a 12 months left earlier than Britain’s March 2019 exit from the European Union, May’s celebration stays deeply divided over what kind of relationship needs to be constructed between the world’s largest buying and selling bloc and the world’s sixth-largest financial system.
Such are the divisions inside May’s government, that the controversy over the extent of Britain’s post-Brexit participation in a EU customs union has taken place in public with key ministers providing a variety of views.
While May has repeatedly mentioned that Britain will depart the customs union, some ministers had hoped that Britain might stay in some type of bespoke customs association with the EU after Brexit.
But supporters of Brexit say one of many primary advantages of leaving the bloc would be the skill to strike commerce offers with different, faster-growing international locations across the world.
The Confederation of British Industry has referred to as for Britain to remain in a customs union and finance minister Philip Hammond final month additionally left open the potential of Britain becoming a member of a brand new customs union.
A customs union signifies that its members apply the identical tariff to items imported into their territory from elsewhere and apply no tariffs to items from different members. It additionally limits checks and different bureaucracies at borders between members.
Unless Britain negotiates a brand new commerce cope with the EU, its exports would run into the union’s exterior tariffs, which common about 5 p.c throughout all items, together with 10 p.c for automobiles and over 200 p.c on sure sorts of poultry.
But May is underneath stress from eurosceptic members in her celebration to stop the buying and selling association as a result of for them the important thing prize is probability to signal new commerce offers with different nations such because the U.S., China and India.
Britain and the EU are resulting from maintain their first formal discussions about what their future relationship will appear like after Britain leaves the EU this week.
EU chief negotiator Michel Barnier will meet his reverse quantity, Brexit Secretary David Davis, in London on Monday for the primary time since EU leaders instructed Barnier to barter a post-Brexit transition interval to ease Britain’s departure.
May will maintain two cupboard conferences on Wednesday and Thursday at which she is going to attempt to heal the deep divisions amongst her ministers over the easiest way to go away the EU.
If no deal is reached by October of this 12 months, many companies worry Britain might face a disorderly exit that may weaken the West, disrupt the peace in Northern Ireland, imperil Britain’s $2.7 trillion financial system and undermine London’s place as the one monetary middle to rival New York.
A disorderly Brexit on account of Britain misjudging the “self-preservation” instincts of the European Union might result in an additional downgrade of the UK’s sovereign credit standing, S&P Global additionally mentioned on Monday.
Writing by Guy Faulconbridge and William Schomberg; Editing by Andrew Heavens