I was listening to Steph McGovern explaining about the Customs Union this morning on BBC Breakfast and the penny finally dropped.

The EU can’t give us the same deal as we have now – even though it will be in their (and our) best interest.

The reason has nothing to do with the EU but more about the rest of the world. I never really understood why it was against the rules for individual EU countries to negotiate trade deals but now I do. If we negotiate a better trade deal with, say India, than the EU has, it creates a ‘back door’ for trade for India into the EU. The back door would create an advantage for the ‘rogue’ country and India at the expense of the rest.

There lies the problem. Once we leave the EU (and Customs Union) we could become the back door. There is no way that the EU can allow that to happen. To make matters worse, the EU will be almost forced to give us the worst terms possible so as to prevent the back door possibility.

Where does that leave the likes of Nissan? At the moment it doesn’t matter to which EU country global parts arrive because the tariff is the same and then tariff free from then on.

After Brexit it DOES matter. Nissan has 2 plants in Spain and is 43% owned by Renault – Renault has 17 factories in the EU. It will not make sense to import global parts into the UK if there are tariff barriers to the EU. The result? Increased costs to the UK factories and future manufacturing decisions will almost certainly be made into EU factories rather than UK ones.

Boris Johnson never told us that.

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