On joining the E.E.C. the UK joined a customs union with a common level of external duties. Being a member of the customs union has its advantages such as the free movement of goods and greater bargaining power in trade negotiations. The perceived economic gain was the main reason the UK joined the E.E.C. in the first place. As it is a customs union the UK is represented in international trade talks by the EU.

But being in a customs union also comes with costs; the common external tariff on goods such as agricultural produce can add costs to the UK and limit the UK's ability to negotiate its own trade deals, with traditional friends based on its own priorities.

There are a number of alternatives to being a full member of the single market which could be explored. For instance:

  • Norway is a member of the single market without being a member of the EU, the CAP or CFP and as such is exempt from the common tariff on agricultural goods.
  • Switzerland has a different relationship in which it governs its relations through a series of bilateral agreements.
  • Turkey is also within the EU Customs union but is not within the single market. Other countries have free trade agreements with the EU.
  • A Free Trade Agreement would give the UK freedom to manage its external trade but may mean complicated rules of origin have to be followed on the components included within UK exports adding costs to business.

The Fresh Start Project will look at these potential agreements against a background of global tariff reductions and the need for global free trade, the UK's trade deficits with the EU and the need to retain market access for the UK's key industries. It will investigate the benefits and costs of the UK's trade relationship with the EU as a whole to see if there is a better alternative.


Trade Chapter (10 Jul 2012)

Green Paper chapter on Trade

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Trading places: Is EU membership still the best option for UK trade? (15 Jun 2012)

 

 

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The minutes of the APPG for European Reform meeting on the Trade and Customs Union can be found here.

Supporting Documents:

- The slides used in the meeting can be read here