The historic decision of the U.K. to exit from European Union (EU) will certainly change dynamics in world politics and trade. The Prime Minister Theresa May has not yet taken any decision on how the split will be like, but she has taken steps to explore outside EU to form relationship to strengthen economy of the country. The recent visit to China with 50 business delegations was fruitful and outlined a golden era of relationship between two countries. The Brexit also caused the worry among top executives of giant companies having European headquarters situated in the U.K. They have been exploring more options to establish headquarters in EU territory. Now, May needs to take more firm steps regarding the split. Among those steps, one of the most important is decision about staying in current customs union.
Though a government official told reporters that May has eliminated the possibility of staying in the current customs union. Under the agreement of EU, all countries had a common external tariff on goods imported to EU. This arrangement prevented countries from imposing tax according to their own structure. There will be a meeting between Chief EU negotiator Michel Barnier and Brexit Secretary David Davis in London on Monday. He would demand an update on the Brexit situation by Friday, February 9. This puts pressure on ministers to reach a common ground during the discussion on Wednesday and Thursday.
Some businesses do not want the U.K. to have different tax structure after the Brexit. Some ministers along with Conservative lawmakers support the same agenda. If May decides to operate as per existing rules in the customs union, Irish border problem will not occur after Brexit. However, she gave her word that there will not be a hard border and she need to keep her word if she wants an amicable exit.
The Prime Minister’s role in reaching a unanimous decision by convincing the divided Cabinet will be crucial. The decision on how the split would look like will be taken in this week. Both extremes of Brexit spectrum have been firm on their stand and those asking for complete split from EU have been demanding firing, posing threats, and raising question about the integrity of civil service of the country. Moreover, she needs to listen to anti-Brexit team seeking at least some ties with EU despite the split. She also has to face hardcore Brexiteers such as Jacob Rees-Mogg, who seeks to split without a transition deal the businesses across the world have been seeking and also outlined the exit from EU should not be accounted for any settlement fees. He also has a support from lawmakers.
Though anti-EU leaders seek the trade deals with countries across the world and get into its role as free-trading nation, Rees-Mogg opposes such policy and outlines that his group will not back up any policies like this. The difference of opinions would be the test the Prime Minister in her ability to reach at a unanimous decision and clarify its stand to EU. The customs union stand will play a crucial role in determining the future of the U.K.-EU bond along with economy of the U.K.