Trade in a customs union

Business welcomes the recent focus on international trade from policy makers and is ready to do its part in boosting it. But the UK’s trade priorities should be driven by evidence, not ideology. The prime market that British businesses want to maintain a close relationship with after Brexit remains the EU, and a customs union, alongside a deep regulatory relationship with the EU, remains the foundation for this.

But trade is more than trade deals. There are many levers that the UK government can pull within a customs union to help boost trade with the rest of the world. Germany trade 4.7 times more with China than the UK. The UK can negotiate a new, bespoke customs union with the EU that works for its economy, influences its trade policy around the rest of the world. It can lead the way with striking new arrangements with countries on key issues such as services and data all while within a customs union with the EU. It just has to ask for it.

This short paper is for UK policy makers to consider when the time comes to decide what shape the UK’s trading relationship with the EU and the rest of the world should be.