CBI director general Carolyn Fairbairn has told MPs that leaving the customs union would have “pros and cons” for many of her business group's members, with many tempted by a free hand in trade negotiations.
Addressing Parliament's, Brexit select committee, Fairbairn said that while the CBI had not yet taken a view on leaving the customs union, it is currently consulting with its members.
The customs union requires members to apply a common external tariff on all goods entering, and with international trade secretary Liam Fox's regular comments in support of free trade, some have speculated that Brexit will include quitting the EU bloc.
“The pros are the ability to conduct our own trade negotiations and we have many members who have a lot of interest in that.
“However, there are serious concerns about the red tape, the bureaucracy, the return of customs barriers and rules of origin reporting that our members are concerned about,” Fairbairn told MPs.
Pressed by Brexit committee chair Hilary Benn, Fairbairn said that for some sectors, concern over future bureaucracy in the aftermath of Brexit is almost as great as that over tariffs.
“To give some examples, manufacturing exporters, who are used to being able to cross, in terms of imports and exports, cross the borders easily, are having to consider what kinds of new warehouses they would have to establish either side of that border, what kind of working capital they would have to hold,” she said.
“The cost of doing business is made up of several components – tariffs is one, non-tariff barriers is another, but that red tape and bureaucracy for many of our members has become a very significant concern in recent months.”
It comes as Brexit secretary David Davis has said the government is continuing to evaluate its position on customs union membership, telling MPs earlier today that the choice will not represent a “binary” in/out discussion, with a number of alternatives being explored.