Theresa May’s Chequers plan for customs deal after Brexit ridiculed as ‘fanciful’
THERESA May’s proposal for a Brexit deal with the European Union has been blasted by trade experts as “fanciful” and based on flawed analysis.
The Prime Minister’s deal, known as the Chequers plan, made a pledge that the vast majority of businesses would pay the right or no tariff at the border but this has now been thrown into doubt.
Experts have also questioned another key part that businesses would be able to reliably track goods to their final destination.
This aspect is particularly important to the EU which has expressed concerns about smuggling in the continent.
Analysis of the proposals has been carried out by Alan Winters, professor of economics and director of the UK Trade Policy Observatory at Sussex University.
He said: “The whole thing when you analyse it is pretty fanciful.”
What are the problems with the plan, according to the experts?
The central claim that 96 percent of products would be able to pay the correct tariff up front was calculated as a proportion of the UK’s total goods trade rather than imports only.
Business leaders say the claim that importers would be able to prove the final destination of every finished product coming into the UK is just fantasy.
Experts said this would in reality be nearly impossible to do and the government’s claims were vastly exaggerated.
They also thought it would also probably never work in practice.
Should her proposal collapse it would increase the chances of having to choose between remaining within the customs union but limiting free trade deals or completely pulling out.
Number 10 said the Chequers proposal corrected flaws in the original idea, which was blasted for being costly for business to implement and undermining the principles for free trade.
The Soft Brexit agreement in 6 bullet points
THERESA May’s UK-Free Trade Area:
- “Common rulebook” would keep British producers bound by EU rules on goods - including farmers.
- Parliament would oversee these rules - but deciding not to abide by them would have “consequences”.
- Joint UK-EU “Joint Committee” to oversee and rule on disputes but these would be settled based on more than 40 years of EU laws.
- Britain to effectively stay in the EU’s customs union - described as a “combined customs territory” - to avoid hard border with Ireland.
- Britain to be responsible for collecting EU tariffs and implementing EU trade policy for goods passing through the UK.
- Britain to leave EU rules for services - with banks losing crucial EU passporting rights that allows them to sell their services across Europe.
Professor Winters told : “It is weird that they are using the whole of trade for the basis of their calculation when it is clear that it is only imports that will be affected and it has nothing at all to do with exports.
“The idea that you would know where all finished goods being imported were headed also doesn’t make sense.
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“This is clearly reasonable for some goods like meat that are heavily regulated, but we cannot see it applying automatically to all goods.”
Anna Jerzewska, an expert in trade agreements, said the government’s assumptions appeared to have been “exaggerated at best”.
“I don’t know any business that is routinely able to determine where all the goods they import end up and in which market. You simply don’t have that visibility,” she said.