Decision time is looming on Brexit.
After months of dithering, delay and obfuscation, the Prime Minister can no longer kick the can down the road.
Theresa May has to spell out how she will resolve the Irish border question.
And that hinges on what sort of customs system we put in place after we leave the EU.
The Prime Minister faces a week of fresh parliamentary battles as clashes centred on staying in a customs union with the EU continue to dog the Government.
Here is why the customs union has become the make-or-break issue for Brexit .
What is the customs union?
The European Union operates as a customs union. This means the 28 member states can trade freely with each other without any checks or duties on goods.
It also means all the countries in the EU set the same tariffs on imports from non-EU countries.
For example, car imports from the US to the EU carry a 10% tariff, while South Africa has to pay up to 16% on the oranges which it exports to the EU.
Why is this such a headache for the Government?
Being in the customs union benefits the UK as the EU is our largest trading partner.
It means firms can move goods and components within the EU without any duties or cumbersome checks at borders.
Lorries can pass freely between Dover and Calais, while South Korean goods in a container unloaded at Rotterdam, for instance, can then be distributed throughout the EU without any further checks.
Despite these advantages, Theresa May wants the UK to leave the customs union.
She argues that if we remain members it means accepting Brussels’ rules without any say on them and we would be prevented from striking our own deals with non-EU countries – one of the main benefits of leaving the EU.
Why is the Irish border so important?
The EU and UK have agreed that after Brexit there can be no return to a hard border between Northern Ireland and the Irish Republic, which is in the EU.
Remainers argue the only way to prevent having checks and infrastructure on the border is to stay in the customs union.
Mrs May has agreed with the EU that if no other workable solution can be found then Northern Ireland will stay in the customs union.
Does Theresa May have a solution?
The Prime Minister is looking at two options. The first is a “customs partnership” with the EU.
This would see Britain collect tariffs on all imports on behalf of the EU. If the UK tariff is lower than the EU one, then firms would be able to reclaim the difference.
The second option is a customs arrangement known as “max fac” or maximum facilitation.
This would use high-tech tracking devices to monitor the flow of goods. Businesses would operate as “trusted traders” and would be able to pay any tariffs at regular intervals rather than every time they cross a border.
What is likely to happen?
The problem for Mrs May is the EU has so far rejected both her preferred options. And without a solution, Northern Ireland will remain in the customs union.
Brexiteers believe Brussels is being deliberately uncooperative to snare us into staying in the EU.
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To add to the Prime Minister’s difficulties, next month MPs will vote on whether to stay in the customs union.
If enough Tory rebels join Labour, then Mrs May’s Brexit plans would be holed below the water.
Mrs May could accept a limited membership of a customs union, but this would split the Tory Party and spark Cabinet resignations.
Or she could walk away without a deal – but that would be economically calamitous.
"Staying in the customs union is the worst of both worlds"
Tory MP Bernard Jenkin
The British people voted to take back control – including over our trade agreements. Some MPs want Parliament to reverse key aspects of the referendum. This is pretty outrageous!
Today, the EU sets the product standards of everything you can buy in our country. And everything made in Britain. They set the tariffs on imports to the UK. If we stay in any kind of customs union with the EU, then the UK still be a “rule taker” of the EU. Except it would be worse than now. We would no longer have a say over new rules.
The EU would also make us keep paying into the EU budget as now. And abandon plans to control EU immigration. In the referendum it was made clear we would have to leave the single market. Instead we can trade with the rest of the world.
Australia has made it clear it is keen to pursue a trade agreement with the UK, but this is not possible if we rejoin the customs union.
Despite being in the EU, our trade with the EU has been going down for the past decade. UK trade with the rest of the world is going up, despite the trade barriers.
Staying in the customs’ union is the worst of both worlds. Still bound by EU rules, but no say over them. Maybe that’s where the EU wants us to be.
"People didn't vote to leave the customs union - let's not be bullied into it"
Labour MP Stella Creasy
Staying in the Customs Union means being part of the world’s most powerful free trade zone and 65 different trade deals, all of which aids jobs and investment.
Leaving means dropping all that in the hope that just maybe Donald Trump would give our $2trillion economy a better deal than he’ll give the $18 trillion EU.
Sir Martin Donnelly, ex-chief civil servant at the International Trade department, said it was like giving up a three-course meal for the promise of some crisps.
Staying in the Customs Union does not just mean our exports to, and imports from, the EU avoid taxes at the border.
It means we stay in Europe’s emerging high-tech, high value-added manufacturing economy. Trading without internal barriers lets firms specialise and maximise competitive advantage without worrying about red tape.
That is why cars made here often contain parts that have been back and forth across the channel.
An EU scheme also means the 50 poorest countries face no tariffs on exports. Staying in the Customs Union will boost the Irish peace process. Leaving means border posts.
It is a myth people voted to leave the Customs Union. Let’s not be bullied into leaving now.
- Stella Creasy is a supporter of the People’s Vote campaign.