Why has it taken Ed Davey so long to advocate joining an EU customs union?

Ed Davey, the Liberal Democrat leader, has finally made a move towards advocating a closer relationship with the EU. Many in his party have been frustrated at his unwillingness to position the party as the unequivocal voice of those who want to rejoin the EU, but in a speech on Thursday, Davey took a step in that direction by calling on the government to negotiate a customs union with the EU.

He argued that this was required in order to deal with Donald Trump from a position of strength. Thus he sought to put some distance between the Lib Dems and Labour in two respects: one, by being more pro-EU, and two, by being more anti-Trump.

In what was billed as a major speech on international affairs on Thursday, he said: “I am calling on the government to negotiate this year a brand-new deal with the EU. Not just tinkering around the edges of the Conservatives’ botched Brexit deal, but agreeing a better deal for Britain. A deal to form a new UK-EU customs union by 2030 at the latest.”

The phrasing is interesting, because a customs union is not as simple as some people might assume. It is not possible simply to “rejoin” the EU’s customs union, because it is integral to membership of the EU. Britain would have to negotiate a separate deal to abolish customs checks between the EU and the UK, similar to the customs union between the EU and Turkey.

A customs union is an agreement not to impose tariffs or other restrictions on trade between two or more countries. We already have a no-tariff agreement in the Trade and Co-operation Agreement, the treaty that governs UK-EU trade since Brexit, but we still have customs checks on goods going between the UK and the EU to make sure that they don’t come from elsewhere in the world, in which case tariffs might be payable. If those checks were removed, it would reduce what are called the “non-tariff costs” of trade.

The other important feature of a customs union, though, is that its members collectively negotiate trade terms with other countries – so if Britain entered a customs union with the EU, it could no longer negotiate its own trade deals around the world. As these deals are worth less than the post-Brexit loss of trade with the EU, this would be no great loss.

The idea that a customs union deal would help “Trump-proof” the British economy against the threat of tariffs imposed by the incoming US administration is flawed. Davey is calling for a customs union deal by 2030, but Donald Trump’s second term will end in 2029.

The customs union plan has some merit on its own. It would be in effect the “soft Brexit” that Theresa May was trying to negotiate when she was prime minister. If the UK copied EU standards and regulations, we could enjoy almost all the benefits of the single market without having to be part of the free movement of people. But it wouldn’t protect us from the threat of US tariffs.