Clean break with EU urged

Theresa May should not try and stay “half-in, half-out” of the European Union customs union and instead pursue a clean break, a think tank has said.

Open Europe said the prime minister should pull Britain out of the union entirely before striking a new “customs facilitation agreement” as part of a comprehensive free trade deal, similar to those enjoyed by Switzerland and Canada.

She should reject a “Turkish model” as it is built for a country on a path towards EU membership, the report said.

A “sectoral” model, with industries with complex supply chains like aerospace, automotive or chemicals, inside a customs union and others outside, would be “complex, legally difficult, and probably unnegotiable”, the think tank said.

Acomprehensive UK-EU free trade agreement would ensure tariff-free

“Legally difficult, and probably un-negotiable”

trade and minimise customs delays.

But the report acknowledged that leaving the customs union would cause one-off costs to adapt to a new regime and “ongoing frictional costs”.

The think tank said these can be minimised and potentially offset by new trade deals with non-EU countries.

Mrs May should consider a transition period to extend customs union membership for one or twoyears after Brexit to increase chances of a favourable agreement for both sides and minimise disruption, Open Europe said.

To solve the problem of the Irish border, Britain should draw on the experience of the customsunion border between Sweden and Norway, which is not a member of the EU.

“A customs border will be required, but it can be almost invisible,” the think tank said, with technology being used to pre- clear goods, and free movement of citizens.