No matter which side you supported during the EU referendum, there is one aspect of the upcoming Brexit that should strike optimism into every Brit – leaving the archaic customs union. Amidst the buses and the slogans, the best argument for leaving the European Union has been overlooked, and it’s high time we re-open the conversation to truly make the best of Brexit.
Formed in 1958 as an original element of the EEC, the customs union is anchored to the heart of European economic policy. Arguably as central to the European trade ideal as freedom of movement, this certainly isn’t something which can be reformed from the inside. A customs union is a group of nations who trade freely amongst themselves, but are protected by a common external tariff. The logic of this contraption is to stop domestic producers inside the union from being undercut by external suppliers. Bliss, right? Wrong.
For this is nothing more than Trump-style protectionism. The practise of blocking producers in developing countries from competing in European markets is as antiquated as it is selfish. It perniciously attacks manufacturers around the world, and the resulting higher prices are to the detriment of the poorest consumers within the customs union. The only people who benefit from this crony-capitalist cartel are the cumbersome suppliers lucky enough to reside within the bloc.
As Eurosceptics are making great efforts to point out, the biggest tariffs imposed on non-EU nations are for rudimentary goods including food, textiles and footwear. A total of over 12,000 tariffs prescribed by the customs unions could be eradicated if the government is proactive in agreeing bilateral trade arrangements in the time before we formally leave the European Union. This could allow the prices of many of the daily essentials we purchase to fall by 10-20% in a matter of days. The price of whisky could fall by 60%.
Wines, wellies, beef and bananas are but a small sample of the vast list of goods protected by high customs union tariffs. But beef and bananas alone probably won’t convince you the system is a basket case – simple economics will suffice. Tariffs, quotas, and trade barriers of the like unfailingly and without exception lead to a situation where everyone on aggregate is worse off.
But what about the British industries who benefit from the customs union as it is? What about our Scotch producers or our dairy farmers or any number of industries which fall under the umbrella of customs union protection? Sure, many suppliers in the UK have heavily benefitted from protection, nobody should dispute that, but at what cost have we propped these industries up? The national gob would gape if we truly understood the jawdropping costs British consumers have shouldered over the last four decades. We’ve paid a heavy price. And this is without mentioning the detriment done to tens of thousands of non-EU producers who are offering us a better deal.
Protectionism is taking from the poor to give to the rich. Sure, it’s great for Spanish orange producers when their South African competitors get lobbed with a 16% tariff, but it’s not good for just about anyone else.
So, if we are to be true to our sentiment when we condemn the dinosaurish mercantile “America First” economic strategy across the Atlantic, or Le Pen’s isolationist balderdash that belongs in a bygone era, we must also chastise the European Union for its grossly illiberal trade ideals. Day by day, the customs union chokes a tide of worldwide progress which is gasping to be realised, and it is the duty of the British government to ensure we are free of its clutches by the end of the current negotiating period.
This contributor is writing under a pseudonym. Find out why The Broad offers this here.