LONDON — Staying in a customs union with the EU after Brexit would be a “complete sellout of Britain’s national interests,” Liam Fox will say Tuesday, in a challenge to Labour and rebel Conservative MPs hoping to alter the government’s Brexit course.
With a parliamentary vote on a customs union looming, the international trade secretary will use a speech in London to spell out why the government opposes such an approach — and issue his strongest attack yet on the policy, which is backed by major U.K. businesses, the Labour party and a number of Tory MPs.
A customs union, Fox will say, would not only limit the U.K.’s ability to reach new trade agreements with non-EU countries — the cornerstone of the government’s “Global Britain” agenda — but would also leave the U.K. forced to accept “EU trade rules without any say in how they were made” and would limit the U.K.’s international development agenda by blocking efforts to help “the world’s poorest nations trade their way out of poverty,” he will claim.
“As rule-takers, without any say in how the rules were made, we would be in a worse position than we are today. It would be a complete sellout of Britain’s national interests,” he will say, according to pre-briefed extracts from his speech to be given at Bloomberg’s London office.
Comparing the position the U.K. would be in to that held by Turkey, which has a form of customs union with the EU, Fox will say that such an arrangement would “remove the bulk of incentives for other countries to enter into comprehensive free-trade agreements with the U.K. if we were unable to alter the rules in whole sectors of our economy.”
The U.K. would be negotiating trade deals with non-EU countries “with one arm tied behind our back,” he will add, saying this would force the government to “forfeit many of the opportunities that would otherwise be available to us.”
Fox’s speech comes a day after Labour leader Jeremy Corbyn set out his party’s support for a customs union with the EU, arguing that it would “ensure that there are no tariffs with Europe and help avoid any need for a hard border in Northern Ireland.”
Labour’s policy shift creates a huge risk for Theresa May’s government, after several Conservative MPs who support as close as possible a relationship with the EU backed an amendment to the Trade Bill, which is due to return to parliament in the coming weeks, which aims to keep the U.K. in a customs union. Labour officials believe that only 10 Tory rebels are needed for the government to be defeated on the amendment.
May is due to set out more details about the government’s plan for the future economic relationship it wants with the EU in a major speech on Friday. But in his speech, Fox will argue that the U.K.’s trading “practices and patterns” need to change after Brexit.
“Our approach should not be premised on simply identifying how much of our current relationship we want to keep, but what we need to prosper in a rapidly changing global environment,” he will say, pointing out that non-EU countries’ share of U.K. trade has increased since 2005 from 44 percent to 57 percent today.
He will say his Department for International Trade, which was set up in the wake of the June 2016 EU referendum vote for Brexit, had been “pursuing a more flexible approach to our country’s trading future.”
“We will consider multi-country alliances of the like-minded right down to bilateral arrangements,” he will say.