New UK-EU customs plan in the works amid crunch Brexit meeting

A new post-Brexit customs plan which would let Britain negotiate free-trade deals with other countries and retain frictionless trade borders with the EU is being proposed.

The "facilitated customs arrangement" compromise plan would closely mirror EU rules, and allow the UK to set its own tariffs on goods arriving in the country.

Prime Minister Theresa May has described the plan as one which "offers the best of both worlds", pleasing both hard and soft Brexit models.

However, the plan has not been explained in full - and it is not clear whether May's cabinet will back the plan, or whether the European Union would agree to it

So far, Brexit secretary David Davis has said, in a letter to the PM, that the plan is "unworkable" because the EU simply won't accept it.

The proposal follows Friday’s (6 July) highly-anticipated Chequers meeting, where Ministers will have hours to map out the government's preferred option for the UK's post-Brexit future.

The FCA is the latest plan by Downing Street to resolve one of the biggest conundrums facing the government, how Britain will be able to strike free trade deals without the need for EU border checks.

Number 10 suggests that the FCA, or the so-called "third way plan", will be a type of customs union for goods, something that should please the agri-food industry.

The EU's customs union helps reduce administrative and financial trade barriers and enhance economic cooperation.

However, they also limit the freedom of their individual members to strike their own trade deals.

The uncertainty of where the Brexit negotiations are heading amid perceived 'hard Brexit' language has prompted the farming industry to call for common sense to prevail.

'Incontrovertible'

The Farmers' Union of Wales (FUW) has said the evidence supporting the need for the UK to remain in the customs union and the single market after Brexit is "incontrovertible", and that common sense "must prevail."

“Continuing membership of these two institutions is the only way to avoid the dire collapse in incomes predicted in the latest AHDB report and in the FAPRI report in August,” said FUW President Glyn Roberts.

The FUW has in the past demanded Welsh access to the customs union, calling it "critical" for rural Wales.

Stephen James, former NFU Cymru President, said that the only ‘sensible option’ for Brexit negotiators was for the UK to remain a part of the customs union, at least until a time where a comprehensive free trade agreement can be reached.

He said: “In my mind the only sensible option is for us to remain in the Customs Union until such time as a comprehensive free trade agreement is agreed between the EU and the UK.”

NFU President, Minette Batters has said frictionless trade with the EU is crucial to underpin market stability – vital not just for farmers but the many wider supply chain businesses that depend on a thriving sheep sector.

In 2015, the value of sheep meat exports to the EU topped £302 million – representing 95% of all such exports.

For the Scottish sheep sector, a report by the AHDB has revealed it could be destroyed by a 'hard' Brexit, with average incomes expected to decline by 210 per cent.

The warnings from the industry follows news of over 100 food and farming organisations calling on the government to maintain free and frictionless trade with the EU.