Will leaving the EU customs union mean border checks?

“Will we continue membership of the customs union, or are we going to see border checks introduced between Northern Ireland and the Republic?... On Monday, the Prime Minister said the [EU] customs union was not a binary choice. I can't think of anything other than a binary choice is [sic] whether you have a border or whether you don't have a border.”

Jeremy Corbyn, 26 October 2016

“The fact that he seems to confuse a customs union with a border, where they are actually two different issues, shows why it is important that it is this party that is in Government and not his.”

Theresa May, 26 October 2016    

It seems odd to say that a customs union doesn’t involve borders.

A 'customs union' is a free trade area whose members apply the same taxes and quotas on imports from countries outside it.

The most famous example of a customs union, as the OECD puts it, is the EU’s version (although some non-EU countries are also part of it, notably Turkey). It’s different to the ‘single market’, which is about the EU’s internal trade rules rather than its relationship with external countries.

All EU countries charge the same taxes on imports from outside the EU—the “common external tariff”, as it’s known. The reasoning is as follows (using an example poached from the Economist):

“If France had zero tariffs on Japanese whisky, but Britain had a 10% tariff, then it would be a profitable wheeze to export Japanese whisky to France, and thence (freely) to Britain. So Britain would have to carefully monitor whisky imports from France, and slap a tariff on any Japanese stuff sneaking in (so-called “rules of origin” regulations).”

Such rules of origin checks are in place between the EU and Norway, for example, because the latter isn’t in the customs union. That suggests that if the UK were outside the customs union, but Ireland remained within it, the same would have to happen on the Northern Irish land border.

The government took this view as recently as February, as do other researchers.

Does all this constitute a “border”? As a general concept: yes. It’s a legal barrier between countries.

In practical, physical terms: not necessarily. As we’ve discussed before, customs checks between Sweden and Norway are fairly light touch. There will have to be checks on products crossing the Irish border, but they might not be particularly intrusive.

Mrs May could be saying that people travelling between countries won’t experience a “border” in these circumstances. It’s true that passport controls are a different issue.

Update (15 August 2017)

The government has produced a position paper on what the UK wants its future customs arrangements to look like. We’ve written about it here.