THE SINGLE CUSTOMS TERRITORY

May's response to Corbyn's letter, on the crucial customs union question is interesting. The Labour leader is keen for us to secure a "permanent and comprehensive UK-wide customs union. This would include alignment with the union customs code, a common external tariff and an agreement on commercial policy that includes a UK say on future EU trade deals". In her reply she seems to think the point is already resolved.  The PM writes (HERE):

"As I explained when we met, the Political Declaration explicitly provides for the benefits of a customs union - no tariffs, fees, charges or quantitative restrictions across all sectors and no checks on rules of origin (paragraph 23)". 

I was interested in this point because I am not sure the political declaration is what she claims it is. This is paragraph 23 in full (HERE):

"The economic partnership should ensure no tariffs, fees, charges or quantitative restrictions across all sectors, with ambitious customs arrangements that, in line with the Parties' objectives and principles above, build and improve on the single customs territory provided for in the Withdrawal Agreement which obviates the need for checks on rules of origin".

First of all, the WA talks about a single customs territory (page 310) as a temporary arrangement only lasting for the transition period. HERE is the Withdrawal Agreement on this topic in full:

Until the future relationship becomes applicable, a single customs territory between the Union and the United Kingdom shall be established ("the single customs territory"). Accordingly, Northern Ireland is in the same customs territory as Great Britain.

The single customs territory shall comprise:

(a) the customs territory of the Union defined in Article 4 of Regulation (EU) No 952/2013; and

(b) the customs territory of the United Kingdom.

The single customs territory is in place only until the future relationship applies. She seems to believe that we will be able to negotiate an extraordinary trade deal with the EU, outside the customs union and without checks on rules of origin and then 'strike our own deals' with other countries. It isn't clear to me how this could ever work - unless we are a permanent member of the EU customs union as Corbyn suggests.

If the EU has tariffs or a TDI (Trade Defence Instrument) in place against another country - Taiwan for example on bicycles - what prevents the UK importing these goods tariff free and re-exporting to the EU? If there are no RoO checks there is no way of knowing if the goods are UK manufactured or not.  It seems to me that Corbyn is being more explicit and realistic while May is hiding behind words in the agreement that disguise her intentions.

Paragraph 23 talks of  'ambitious customs arrangements' and using 'objectives and principles' to 'build and improve on the single customs territory' in the WA as if what will be negotiated is better and closer than during the transition period. What can this be except membership of the CU?

Contradicting this Mrs May goes on:

"However, it also recognises the development of the UK's independent trade policy beyond our economic partnership with the EU (paragraph 17)". 

If this is what is eventually negotiated it will surely be a first and will render any Rules of Origin checks between customs territories or free trade areas anywhere in the world totally redundant.

I can't see it happening myself.