Business leaders in the United Kingdom are pushing for a “hybrid” form of trade deal following Brexit.
The concept they are seeking involves a “partial customs union” to improve U.K.-E.U. trade capabilities.
The Institute of Directors stated that the sought-after deal would make it simpler for goods to travel between the United Kingdom and European Union. At the same time, it would also require the U.K. to establish its own trade agreements.
The concept of maintaining membership within the customs union has been a primary issue for negotiations among both U.K. and the European Projects Association (EPA) in Brussels.
Business leaders have suggested that the United Kingdom attempt to obtain a “hybrid” form of trade deal for once it separates from the E.U. This would help to make certain that key industries maintain their competitiveness. At the same time, it would make it possible for the British government to keep up its referendum promises that stated an independent trade policy would be established.
Partial Customs Union
The Institute of Directors (IoD) recently published a report in which they proposed the idea of a “partial customs union.” The IoD’s members include company execs from businesses of all sizes. The report suggested that this partial customs union include processed agricultural products and industrial goods. Those two sectors are central to the British economy.
Within the report, the IoD presented arguments that by establishing this type of partial customs union, cross border trade would be simplified but the U.K would have the opportunity to form its own trade agreements, both aligning with the negotiations with the E.U. and by negotiating individually with some of the countries with which the E.U. has not yet sought trade agreements.
Looking to Turkey
According to the IoD report, the E.U. has already begun efforts to offer Turkey a greater role in trade policy within the European Union. This is particularly true in areas for which the customs union deal provides direct coverage. The report stated that by adding clauses to the trade agreements in order to make it possible for additional non-E.U. countries to negotiate their own deals on tariff preferences with Turkey.
The U.K. would use that precedent, said the proposal. It would seek similar treatment to what Turkey has negotiated. Moreover, there is the possibility that the U.K.’s position could be more powerful than that of Turkey since a number of those non-E.U. countries are already looking to establish trade deals with the United Kingdom once Brexit has occurred.