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Calls for a New UK-EU Customs Union Gaining Momentum

The Liberal Democrats have urged Labour leader Sir Keir Starmer to take decisive action during his upcoming meeting with European leaders in Brussels by proposing the establishment of a new UK-EU customs union. This meeting marks a significant moment as it will be the first invitation extended to a British prime minister by European leaders since the UK’s exit from the EU in 2020.

Lib Dem leader Sir Ed Davey implied that such a customs union could act as a catalyst for the UK economy, suggesting it would enhance trade opportunities and provide a stronger platform in dealings with international leaders, including US President Donald Trump. Despite this, Starmer has firmly ruled out rejoining the EU customs union and the single market, labeling this as a critical boundary for Labour.

However, Labour has left the door open for the UK to align with another framework known as the Pan-Euro-Mediterranean (PEM) convention, potentially paving the way for a reset in relations with Europe.

Enhancing Trade and Revenue

The PEM agreement facilitates tariff-free trade of various goods across numerous countries, encompassing regions from Europe through to North Africa and the Middle East. The Liberal Democrats are advocating for UK participation in this convention as a stepping stone towards rejoining the customs union with the EU, which would permit tariff-free movement of goods among EU member states, albeit limiting individual trade agreements.

The long-term ambition of the Liberal Democrats remains to reintegrate the UK into the EU, although their campaign efforts on this front have only intensified since the last general election.

As Starmer focuses on defense and security collaboration during his Brussels visit, Downing Street emphasizes this strategic focus rather than economic negotiations. In anticipation of his televised discussion on the BBC’s Sunday with Laura Kuenssberg, Davey has reached out to Chancellor Rachel Reeves, requesting the Office for Budget Responsibility (OBR) to investigate the potential economic impact of a new customs arrangement with the EU.

In his correspondence, Davey highlighted, “The chancellor is tying herself in knots trying to think up new ways to grow our economy. But there’s a solution right under her nose: a new UK-EU customs union deal that boosts trade for British businesses and raises vital tax revenue for our public services.”

Navigating Political Challenges

In recent discussions, the EU’s trade chief Maros Sefcovic expressed a willingness to consider the UK joining the PEM as part of a broader post-Brexit strategy. However, the UK government’s position remains guarded, with officials reiterating their commitment to reduce trading barriers while adhering to their pre-established limits. Statements from the government underscore that the PEM does not equate to reviving a customs union, adhering to policies against free movement and rejoining the single market.

The Conservative Party has criticized the proposal to engage with PEM, framing it as a potential regression towards EU dependency. Conservative leader Kemi Badenoch has claimed that Labour’s approach might inadvertently undermine the ramifications of Brexit, citing multiple conditions she expects Labour to meet to avoid any form of “backsliding” into EU regulations. These conditions include maintaining strict controls on immigration and securing fishing rights, along with ensuring that NATO remains the primary authority on European security matters.

This unfolding dialogue around a new customs union and potential partnerships with European frameworks indicates a growing complexity in post-Brexit trade relations and the political landscape as parties grapple with the repercussions and future direction of the UK’s relationship with Europe.

Source
www.bbc.com