Theresa May on Customs and Borders

Two days ago PM Theresa May held her speech about Brexit, outlining the way forward – in where she afterwards said she was setting out an “ambitious vision” for the future partnership, but also “a practically based” and being “straight with people”.

Theresa Mays’ comments on her speech

This is what the PM said in her speech on the topic of Customs and Borders:

“….Lastly to achieve as frictionless a border as possible and to avoid a hard border between Northern Ireland and Ireland, we also need an agreement on customs.

The UK has been clear it is leaving the Customs Union. The EU has also formed a customs union with some other countries.

But those arrangements, if applied to the UK, would mean the EU setting the UK’s external tariffs, being able to let other countries sell more into the UK without making it any easier for us to sell more to them, or the UK signing up to the Common Commercial Policy.

That would not be compatible with a meaningful independent trade policy. It would mean we had less control than we do now over our trade in the world. Neither Leave nor Remain voters would want that.

So we have thought seriously about how our commitment to a frictionless border can best be delivered. And last year, we set out two potential options for our customs arrangement.

Option one is a customs partnership between the UK and the EU. At the border, the UK would mirror the EU’s requirements for imports from the rest of the world, applying the same tariffs and the same rules of origin as the EU for those goods arriving in the UK and intended for the EU.

Option one is a customs partnership between the UK and the EU. At the border, the UK would mirror the EU’s requirements for imports from the rest of the world, applying the same tariffs and the same rules of origin as the EU for those goods arriving in the UK and intended for the EU.

By following this approach, we would know that all goods entering the EU via the UK pay the right EU duties, removing the need for customs processes at the UK-EU border.

But, importantly, we would put in place a mechanism so that the UK would also be able to apply its own tariffs and trade policy for goods intended for the UK market. As we have set out previously, this would require the means to ensure that both sides can trust the system and a robust enforcement mechanism.

Option two would be a highly streamlined customs arrangement, where we would jointly agree to implement a range of measures to minimise frictions to trade, together with specific provisions for Northern Ireland.

Option two would be a highly streamlined customs arrangement, where we would jointly agree to implement a range of measures to minimise frictions to trade, together with specific provisions for Northern Ireland.

First, measures to ensure the requirements for moving goods across borders are as simple as possible.

This means we should continue to waive the requirement for entry and exit declarations for goods moving between the UK and the EU. And we should allow goods moving between the UK and the rest of the world to travel through the EU without paying EU duties and vice versa.

Second, measures to reduce the risk of delays at ports and airports. For example, recognising each other’s “trusted traders” schemes and drawing on the most advanced IT solutions so that vehicles do not need to stop at the border.

Second, measures to reduce the risk of delays at ports and airports. For example, recognising each other’s “trusted traders” schemes and drawing on the most advanced IT solutions so that vehicles do not need to stop at the border.

Third, we should continue our cooperation to mitigate customs duty and security risks. And fourth, measures to reduce the cost and burden of complying with customs administrative requirements, including by maximising the use of automation.

And recognising the unique circumstances in Northern Ireland, and our shared commitments to avoiding a hard border, we should consider further specific measures.

80% of North-South trade is carried out by micro, small and medium sized businesses. So for smaller traders – who as members of the community are most affected but whose economic role is not systemically significant for the EU market – we would allow them to continue to operate as they do currently, with no new restrictions.

And for larger traders we would introduce streamlined processes, including a trusted trader scheme that would be consistent with our commitments.

And for larger traders we would introduce streamlined processes, including a trusted trader scheme that would be consistent with our commitments.

Both of these options for our future customs arrangement would leave the UK free to determine its own tariffs with third countries – which would simply not be possibqle in a customs union.

I recognise that some of these ideas depend on technology, robust systems to ensure trust and confidence, as well as goodwill – but they are serious and merit consideration by all sides.

So to conclude on goods, a fundamental principle in our negotiating strategy is that trade at the UK-EU border should be as frictionless as possible with no hard border between Northern Ireland and Ireland.

We believe this can be achieved via a commitment to ensure that the relevant UK regulatory standards remain at least as high as the EU’s and a customs arrangement.

We recognise this would constrain our ability to lower regulatory standards for industrial goods. But in practice we are unlikely to want to reduce our standards: not least because the British public would rightly punish any government that did so at the ballot box.”

Here is a link to the entire speech: Theresa May speech

I hope and believe that we have now moved into the next phase where the possible Customs solutions start to materialize and we can make sure that these solutions meets the demands and requirements making the necessary Customs and Government formalities as fast, safe and predictable as possible to the lowest possible cost for all stakeholders. This is the ‘invisible’ border – SmartBorder 2.0′ – combining Customs techniques with state–of-the-art technology in a best practice implementation of international standards utilized to a maximum degree. Is it possible? Yes, it is. UK, Ireland and also e.g. Netherlands have professional Customs Services that are very highly respected in the Customs community and given the right support they can make this happen.

If this is done, UK would not only get a Customs /Border solution – and an operational model – that can handle the post-Brexit situation on all UK borders and for all transport modes, but UK would in fact get the most modern Customs process in the world facilitating trade with all trading partners.