04:19 GMT07 April 2020
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    A UK manufacturing group is reportedly poised to urge the Tory and Unionist cabinet not to pull Britain out from the EU customs union, alleging that remaining in the single market post-Brexit could produce double benefits for the UK.

    Kristian Rouz — The key British lobbying group representing the nation's industries is set to call on the Tory and Unionist cabinet to make every effort to remain in the EU customs union. The group alleges that unrestricted access to the continental market, coupled with broader overseas opportunities, could maximize the UK's gain from Brexit.

    Director General for the Confederation of British Industry (CBI) Carolyn Fairbairn is slated to deliver a major speech on Monday. She will reportedly call on the cabinet to maintain the UK's status as part of the single European market, which, on the one hand, is, "consistent" with the Brexit agenda, and, on the other hand, "good for EU firms" as well.

    This might render EU officials more inclined to give in to some of the London's demands in the ongoing negotiations.

    READ MORE: PM May: Scottish Economy Lags Behind Rest of UK Due to One-Party System

    Some of Fairbairn's upcoming comments have been made available to the media ahead of the speech.

    "The idea behind a customs union is simple: a single set of tariffs for goods imported from outside the EU, enabling tariff-free trade within it," Fairbairn is reportedly poised to say. "It brings no obligations over freedom of movement, or payment and removes some of the heaviest trade barriers."

    This comes as UK manufacturing has experienced a resurgence since the Brexit vote back in June 2016, coupled with a rise in national exports. The UK has bolstered its presence in several key overseas markets, not least due to a devaluation of the national currency — the pound sterling — in the wake of the 2016 referendum.

    READ MORE: Most Scots Oppose Sturgeon's Plans for Scotland to Stay in EU Single Market

    At the same time, remaining part of the customs union, the CBI argues, would allow them to avoid disrupting existing trade ties. The UK will also maintain its presence on the continental market, whilst eliminating the disadvantages of being part of the EU — such as mass-migration.

    This appears to be a win-win situation for Britain — especially so, for Scotland — whilst the EU would maintain some of its presence on the UK market as well, minimizing the negative effects of Brexit to its own companies.

    Remaining part of the customs union might also bring certain benefits for the UK's financial sector. Many financial institutions fear a "hard Brexit" would force them out of the UK — likely, to Ireland or France — and Britain would face a moderate threat of disinvestment.

    READ MORE: UK Unlikely to Get Equally Good EU Single Market Deal as Norway — Economist

    However, Prime Minister Theresa May is currently aiming to pull the UK out of the customs union. This would bolster the UK's trade opportunities with Australia, New Zealand, and the US to a greater extent than if the UK remains in the single market, the Tories argue.

    Some industries, such as pharmaceuticals, are concerned about the possible implications of such a move to their business.

    "Any change to existing customs arrangements could create border chaos, cause damaging delays and ultimately put patients and public health at risk," chief executive of the Association of the British Pharmaceutical Industry Mike Thompson said in a statement ahead of Fairbairn's remarks.

    The CBI represents roughly 190,000 British private-sector enterprises, which employ a total of 7 million people. Fairbairn is also expected to urge PM may to speed up the talks with the EU, as delays might cause further turmoil.

    "Time is running out — by March next year our country will be out of the EU," Fairbairn is allegedly set to say. "We need to end this game of who-blinks-first and instead find a new spirit of urgency."

    This comes after the President of France Emmanuel Macron and several key EU officials took a softer stance on the UK's aspiration to leave the bloc. Macron said a "special" trade deal with the UK is "possible," whilst the EU chief negotiator Michel Barnier said the UK could get a free trade deal with the EU.

    The EU, however, is still reluctant to give the UK a free trade deal, which would include financial services. If London remains in the single market, as the CBI would suggest, mutual exchange in financial services might face less to no interruptions after Brexit comes into force in spring of 2019. 

    manufacturing, economy, European single market, customs union, Brexit, Confederation of British Industry (CBI), European Union, Scotland, Britain, United Kingdom
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