In her Mansion House speech, the Prime Minister set out five tests for the EU negotiations and the agreement that we will reach through them. The first test was the need to respect the referendum result and the desire of the people expressed through that referendum to take back control. The customs union plan entirely gives up control to the EU, and the free circulation of goods would also need regulatory harmonisation in the single market, as we just heard. The second test was that the agreement must endure. The customs union plan, which would go against the outcome of the referendum and the election, would divide the country and not settle the issue.
The third test was that the arrangement should protect jobs and security through our continuing to work together with the EU. The customs union plan would give our commercial policy, our trade defences, our tariff levels and our relationships with third countries to the EU, and I do not see how that is consistent with that test. The fourth test was that we would be a confident, modern, outward-looking country that is proud to stand up for its values, but the customs union plan would mean that we would be unable to make our way independently in the world, and to spread our belief in free trade and the opportunities that come from it. The fifth and final test was that the arrangements should strengthen our Union and our union of people, but the customs union plan would take their sovereignty and powers and give them to the EU. It would weaken them, and weaken and discredit their representative institutions.
If the proponents of the customs union succeeded in getting it adopted, and if the Transatlantic Trade and Investment Partnership were revived as a trade agreement
between the US and the EU, the EU could commit the UK to that without Britons having any practical say at all. The Cabinet resolved recently—the Prime Minister expressed its settled view—that it wants the freedom to negotiate trade deals with other countries and to take back control of our laws. The customs union plan goes directly against that.
In the final seconds of my contribution, I want to say that the customs partnership idea, which is one of the options, has serious problems. Full traceability is a long way off and would impose costs on every transaction throughout the economy. The full circulation of goods would require full regulatory harmonisation, and full ECJ oversight and submission to it. The need to make rules of origin declarations would not go away because importers would still have to cope with that—they would just be EU rules of origin.
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