WHAT ACCEPTANCE OF A CUSTOMS UNION WOULD MEAN FOR THE UK

The economic arguments against staying in the EU Customs Union are important, but the political and constitutional consequences are even more profound. Staying inside the EU Customs Union after ceasing to be a Member State would necessarily entail a severe and continuing curtailment of the UK’s powers to govern itself as an independent state and would subject it to the continuing effective jurisdiction of the European Court of Justice (ECJ). In particular:

1. The UK would be obliged to operate a system of external tariffs according to the Common Customs Tariff decided by the EU, and would be obliged to follow future changes made to the Common Tariff, while not having a vote on those changes.
2. The UK would not be allowed to enter in to trade agreements involving reduced or zero tariffs with non-Member countries, which would make it in practice impossible to conclude meaningful trade agreements. It would in practice be obliged to follow the terms of trade agreements reached by the EU with non-Member countries or blocs, without having a vote on those agreements or on how they are negotiated. It is hard to see what useful purpose would be served by having a Department of International Trade.
3. The UK would be obliged, either directly or via an indirect mechanism similar to that of the EFTA Court under the EEA Agreement, to continue to be bound by past and future decisions of the ECJ on the interpretation of the common rules of the customs union.
4. If (as seems inevitable) the continuing customs union with the EU extends to non-tariff customs controls (such as certification of compliance with technical or safety standards, health requirements for food, etc) the UK would be obliged to follow the EU’s future rule changes on all these matters as well as interpretations of the rules by the ECJ.
5. The UK would have to apply these same rules and regulations across its own domestic economy as well. WTO rules do not permit the UK to operate different or more stringent standards on imported goods than the rules under which  the UK allows goods to be put on its domestic market.
6. Having to follow the EU’s common rules on such non-tariff customs controls would (1) mean that the UK would be unable to negotiate changes to such controls with non-Member countries in order to facilitate trade with them and (2) make it in practice very difficult indeed for the UK to change its own rules for goods in its domestic market to differ from those applicable to imported goods under the Customs union common rules.
7. Overall, the UK would be significantly worse off than it is at present as an EU Member because it would be bound by the common rules of the EU customs union over wide areas of policy, be unable to operate an international trade policy independently of the EU, but have no vote on these matters.