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UK may opt to apply same trade tariffs as EU after Brexit: Lawmaker

February 21, 2018 00:00:00

BRUSSELS, Feb 20 (Reuters): A post-Brexit customs arrangement with the European Union (EU) could start with Britain sticking to the same external trade tariffs as the bloc, a senior European lawmaker said on Monday.

The EU is waiting for London to outline what sort of future relationship it wants with the other 27 nations, with one of the most politically sensitive issues being how to avoid erecting a border across the island of Ireland.

Prime Minister Theresa May, who is expected to present her recipe for that in the coming weeks, wants to leave the EU's single market and its customs union. But the bloc says that this would lead to border checks between the Republic of Ireland and the British province of Northern Ireland.

"A solution must be found," said Danuta Hubner, a Polish member of the European Parliament who deals with Brexit.

"If you have full regulatory alignment, that would allow a border to be avoided. But how to do it for this one region - no one has come up with the solution yet."

While being inside the EU's customs union means trading freely and without tariffs between members, a customs union with an outside country allows non-tariff trade barriers - such as quotas or regulatory standards - and therefore still requires border checks. The EU already has such a customs union with Turkey, albeit excluding agriculture.

"If there were a customs union with the EU, or a customs arrangement, there would be border checks. For food safety in Europe, our biggest obsession, there is no way to avoid checks if you are not inside. It's completely ruled out."

Hubner said Britain could make a start on tackling the conundrum by maintaining the same external trade tariffs on goods as the bloc.

"Any country can announce that it has the same external customs tariffs as the EU," she told Reuters.

"There may be a way out in not calling it the customs union but in fact upholding conditions that would allow for full regulatory alignment. The starting point would be maintaining the same external tariffs."

She said any such agreement would need to include guarantees that Britain would not deviate from the EU's tariffs, and a mechanism that monitored compliance and allowed the block to react swiftly to protect its market in case of a dispute.

"They (Britain) are looking for a solution but they still have clarity mostly on what they don't want. But it's still uncertainty about what they want," Hubner said.

"When one looks for their positive agenda, it all leads to full membership in the end. They told me today they don't want to be in the customs union, but they want some sort of customs arrangement that would give the same outcome."

Hubner said that if Britain crashed out of the EU on March 29, 2019, without a deal on what comes next, there would be disruption to the aviation, auto, chemical and financial sectors among many others as existing cooperation schemes and legal frameworks became void overnight.

"We must avoid this," Hubner said. "This would really be a nuclear scenario ... But time is running out. At this stage, we don't have a minute to lose."

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