This report sets out the IoD’s position on what the UK should seek to replace its current customs union with the EU.
We argue that the UK should pursue a new, bespoke, and partial customs union with Europe.
This agreement would cover all industrial and some processed agricultural goods, removing the need for UK manufacturing firms to face burdensome ‘rules of origin’ which could render a tariff-free deal meaningless for many companies in these sectors.
At the same time, it would allow the UK the freedom to forge its own trade policy and seek free trade deals with other countries in areas not covered – meaning we could remove tariffs on most agricultural products from the world’s poorest countries.
The UK should seek to complement this partial customs union with a wide-ranging free trade agreement with the EU on areas not covered in the union.
The report argues that the UK can use the example of Turkey when negotiating these agreements. Turkey is currently part of a partial customs union with the EU, and there is momentum on both sides in favour of complementing this with a wide-ranging free trade agreement.
The UK and EU should focus on outcomes, not process. The option outlined in this paper would provide the continuity needed by some of our strategic sectors, alongside the autonomy over trade policy that was put forward as an argument in favour of Brexit.
Customising Brexit - full report