Theresa May urged to pursue clean break deal with European Union
Theresa May should not try and stay "half-in, half-out" of the European Union customs union and instead pursue a clean break, a think tank has said.
Open Europe said the Prime Minister should pull Britain out of the union entirely before striking a new "customs facilitation agreement" as part of a comprehensive free trade deal, similar to those enjoyed by Switzerland and Canada.
She should reject a "Turkish model" as it is built for a country on a path towards EU membership, the report said.
A "sectoral" model, with industries with complex supply chains like aerospace, automotive or chemicals, inside a customs union and others outside, would be "complex, legally difficult, and probably un-negotiable", the think tank said.
A comprehensive UK-EU free trade agreement would ensure tariff-free trade and minimise customs delays.
But the report acknowledged that leaving the customs union would cause one-off costs to adapt to a new regime and "ongoing frictional costs".
The think tank said these can be minimised and potentially offset by new trade deals with non-EU countries.
Mrs May should consider a transition period to extend customs union membership for one or two years after Brexit to increase chances of a favourable agreement for both sides and minimise disruption, Open Europe said.
To solve the problem of the Irish border, Britain should draw on the experience of the customs union border between Sweden and Norway, which is not a member of the EU.
"A customs border will be required but the border can be almost invisible", the think tank said, with technology being used to pre-clear goods, and free movement of citizens permitted under the common travel area, which predates the EU.
Open Europe's policy analyst, Aarti Shankar, said: "We have looked at the evidence and at international examples, and conclude that leaving the EU's customs union is the right decision for the UK.
"If the UK remained in the customs union after Brexit, it would not be able to meet the Government's ambition of conducting an independent trade policy and achieving a truly 'global Britain'.
"There is a trade-off between minimising disruption to UK-EU trade and ensuring the UK is able to shape its own trade policy post-Brexit.
"Any model that keeps the UK 'half-in' the EU's customs union would constrain its ability to strike trade deals across the world.
"The UK and the EU should aim for full customs cooperation as part of a comprehensive free trade agreement.
"This is perfectly achievable, and the EU already holds customs facilitation agreements with other trade partners, including Switzerland and Canada."