Britain should stay in customs union after Brexit, Irish and Northern Irish business groups say

Groups representing business in Ireland and Northern Ireland have urged the British government to change its Brexit policy and keep the UK inside the EU’s customs union.

In a joint statement the Northern Ireland branch of the CBI and its Irish equivalent Ibec said “a comprehensive customs union between the UK and the EU would help address some of the complex issues presented by Brexit”.

They argued that the policy, which Theresa May has previous ruled out, would also “help to avoid any disruption to east-west trade between Ireland and Britain”.

The pair of organisations also called for the signing of a “backstop” to prevent a hard border on the island of Ireland and said the policy, which is being resisted by some unionists, was important to avoid “enormous economic damage” that a no-deal could bring.

EU chief Brexit negotiator Michel Barnier on Wednesday said he still open to allowing the UK to stay inside a customs union with the bloc. The policy is already backed by the Labour party, but Theresa May and other Brexiteers are against it because it would prevent the UK from signing its own trade deals with third countries.

Crawford Falconer, the UK’s chief trade negotiator, earlier this week told the Telegraph newspaper that he would be redundant is the UK decided to stay in a customs union with the EU.

Without a customs union there would be customs checks on all trade between Britain and the EU. A customs union would not remove the need for other checks on goods, however, such as regulatory and safety checks – which can only be removed by membership of the single market.

The Prime Minister’s plan for frictionless trade, nicknamed Chequers, was rejected by EU leaders at a summit in Salzburg last month. The PM has hoped the UK could have the benefits of no border checks without the responsibilities of customs union and single market membership.

Angela McGowan, Director CBI Northern Ireland said: “As a small peripheral economy Northern Ireland must absolutely make the most of all trade opportunities North-South and East-West.

“At this crucial time, the business community has a responsibility to stay focused on our long-term ambition to deliver greater economic prosperity for all. This evidence-based report demonstrates why we must stay fully committed to supporting all the necessary conditions to maintain peace, encourage investment and create jobs for future generations.

“The Good Friday Agreement and frictionless trade across and between these great islands are the bedrock of future success.”

Ibec Director of Policy and Public Affairs Fergal O’Brien said: “Over the last two decades, Ireland and Northern Ireland have developed an all-island economy that has benefited business in terms of improved scale and greater efficiencies.

“Any new Brexit-related trade barriers would greatly undermine the benefits that have accrued from maintaining an invisible border. They would create major difficulties and disruptions for integrated ‘just in time’ manufacturing and supply, with SMEs particularly exposed. The most urgent priority for business on the island of Ireland is to avoid a cliff edge hard Brexit.”