The Scottish and Welsh regional administrations are urging the government to stay in the single market – predictably, since it effectively means staying in the EU and under the authority of its Court of Justice. But they are also calling for Britain to stay in the Customs Union.
Now, a customs union can be a handy thing. It means mutually accepted tariffs, and allows goods accepted in one country in the union to be transported without checks or proof of origin through or to any other country in the union.
As it happens, only one proper country has a customs union agreement with the EU – Turkey – and it’s a partial agreement. (The statelets Andorra, Monaco and San Marino are also part of the single market.) The deal was signed in 1995, and covers manufactured goods and processed agricultural products.
But for a Britain seeking independence from the EU it would be just another chain. Sinan Ülgen, a former Turkish diplomat and someone who helped negotiate its customs union with the EU, has pointed this out. The most important problem for Britain, he says is “the ensuing loss of independence in trade policy”.
Specifically, he says, “A customs union member is held to follow the EU trade policy and cannot negotiate separate free trade agreements with third countries independently of the EU.”
So Turkey, with its partial access to the customs union, cannot negotiate trade agreements with other countries on manufactured goods and processed agricultural products.
A full customs union between Britain and the EU would mean handing all trade policy back to Brussels. Britain would not be able, then as now, to negotiate any trade agreements at all.
And since trade is at the heart of modern society, a lot of things flow from a customs union. Germany well understands this. Its own customs union (Zollverein), begun in 1834, was a precursor of the unification of Germany in 1871.
• Related article: Real independence and the single market trap