Claims by Leavers that the Alpine country’s ‘invisible’ borders show how Britain can operate outside the customs union are filled with more holes than a Swiss cheese.
As worrying as the cold, hard facts of Brexit are, what should concern us more are the sheer fantasies still being spun by the isolationists as they desperately chant their mantra that leaving Europe will be painless.
The latest myth to be peddled is that Switzerland has little or no regulatory controls on goods that travel between the Alpine nation and its neighbours, and that border posts on roads going in and out of the country are virtually non-existent.
The context for these myths is Ireland, where people on both sides of the border are fearful that if the UK leaves its present customs union arrangements with the EU, it will be necessary to erect a physical border, to start controlling goods that travel between the north and south, reflecting the fact that the two areas will have different trade rules, duties and tariffs.
Since Switzerland already stands outside the EU’s customs union, yet is surrounded by busy borders with it, it has become the focus of attention for Brexiteers desperately trying to claim that the riddle of the Irish border can be easily and painlessly resolved.
But their assertions do not stand up to scrutiny, once the logic of how trade works is applied – as the case of Switzerland shows all too clearly.
Before June 2016 there was hardly an MP or a journalist who knew what a customs union was, or who had ever worked on trade policy, or examined the volumes of rules and ordinances the World Trade Organisation produces.
From the dawn of European partnership and integration in the 1950s, a core principle has been that countries which signed up to economic cooperation would not impose tariffs or duties on goods or farm products crossing their borders.
In essence that is what a customs union is – a defined area within which free trade can be conducted. To preserve such an area, borders are needed at its frontiers, to ensure tariffs, duties and safety checks are imposed on goods coming into the zone. The EU makes an exemption for 51 of the world’s poorest countries, allowing them to export to Europe tariff-free. But for other nations, there are quotas and tariffs to stop the abrupt dumping of goods that could harm the businesses operating within the customs union.
Trade is always highly political, as well as economic. America is in a free trade agreement with Canada and Mexico. But Mexican lorries carrying Corona beer can get as far as the US border before they have to offload their pallets of beer onto American trucks, as the US truckers’ union, the Teamsters, has ensured that their Mexican counterparts cannot drive their vehicles throughout America in the same way that British lorries can drive to Poznan or Portugal to deliver anything produced in the UK.
New Zealand and Australia have been wrangling with one another over quotas for apple imports for nearly 100 years. Brazil could produce enough chickens to supply the world’s demand for poultry meat products. Australia’s hormone-altered beef and lamb could arrive more cheaply in Britain than the cost of Welsh or Yorkshire lamb. But countries don’t like to see their lamb farmers shut down or the local poultry industry, with its free range or organic chicken, disappear under cheap imports made to much lower standards. Hence the need for borders.
One of the toughest countries at controlling all food coming into it is Switzerland, which employs 22,000 customs officers to enforce its border – more than the total of UK, as Britain is currently in the EU customs union. It is illegal to cross the Swiss border with more than one kilo of meat from a cheaper supermarket in France or Germany, without declaring it to customs officers and paying the appropriate duty.
Unlike Brits who fill their cars with beer and wine when coming home from a continental holiday, the Swiss are only permitted five litres in the boot of their car when returning home, unless they declare it, or want to run the risk of being caught and fined for what, in effect, is smuggling.
At the border there are large, concrete customs buildings, with flow lanes and inspection sheds, operating 24/7.
These physical controls exist because the country is outside the European customs union and it is precisely the erection of such border posts, sheds and huts that so frighten the Irish, representing, as they do, a return to a physically-divided Ireland.
In response, Brexit propagandists try to deny that this re-partioning of Ireland will be a problem. One way in which they have tried to achieve this is by implying that Switzerland’s borders with the EU are virtually non-existent, as Daniel Hannan, the Conservative MEP, suggested on Newsnight recently.
He even had the cheek to write, in an article for the Sun: ‘I cross the EU’s border with Switzerland every month. Not that I’d notice if I didn’t know it was there. Most of the crossings between the EU and its neighbour are unmanned. Some are invisible.’
But that does not quite give the full picture. Of course there are many small paths and narrow rural roads that cross into Switzerland – like those that bisect other frontiers in European – which do not have physical check points. And, as part of the EU’s Schengen area (unlike the UK), there is no need for passport checks. But Swiss customs laws remain in force, all along the Swiss frontier. The border is still there, in a very meaningful sense. The absence, in some remote spots, of physical check points does not constitute a ‘frictionless’ frontier. And the border posts on main roads are far from invisible.
When I worked in Geneva, before becoming an MP, I lived 100 metres from the French-Swiss border post on a minor road between the French Jura region and the Geneva canton. Border posts on both sides were staffed all day and all night. Of course, most cars were waved through, especially those with local number plates. But some were stopped and checked in case they broke Swiss law and brought in more meat, poultry or alcohol than permitted.
When working in Switzerland I once bought a coat in a winter sale in London and when I arrived at Geneva airport, the customs official noticed the Harrods bag, took out the item and made me pay a lot of duty on it – more than I saved on the sale price.
Hannan’s claims about the near-absence of border controls and customs procedures brought a tsunami of mocking corrections on Twitter, with people posting pictures of giant border control gantries, floodlights, and buildings on the main motorway entry points into Switzerland, as well as a map of the country indicating exactly where Swiss borders have physical entry and customs controls. Other people reported their experiences of the queues which build up on Swiss-EU borders – just as they will build up on the Irish border, if the UK leaves the customs union.
Another border denier is the columnist Melanie Phillips, who described EU-Swiss crossings as ‘frictionless and unmanned’ in an article in the Times.
Again, she was, at least, pulled up on this by members of the public. One man wrote to the paper to describe how he had to pay a heavy fine for taking four chickens across the border without declaring them to customs officers.
The idea that the Swiss border is an ‘invisible’ one, which can be easily disregarded is absurd. I recently met with the former Swiss foreign minister Micheline Calmy-Rey, at a talk she was giving about how the country handled its customs controls. I asked if it were true there were now no physical borders between Switzerland and its EU neighbours and received a look as if I were mad. ‘Non, Non,’ was the reply.
There is a great deal of ‘pre-clearance’ done by big firms involved in shipping goods between Switzerland and Europe, so checks can be made before the items actually reach the physical border to ease their passage between countries.
In addition, there are plenty of apps which allow you to pay customs duties as you enter Switzerland. So, yes, there are technologies which may be able to help with easing some pressure on borders. But they are nowhere near being the ‘solutions’ to the border issue that Brexiteers pretend.
Technological innovations do not mean the border disappears. The whole point of being in the customs union is that we do not have to pay duties going across border between EU member states – whether via an app, or in person.
If you try and send a book to a friend in Switzerland from the UK, the Post Office will ask you to fill in a small customs form to stick on the packet. If you can imagine multiplying that process millions of times you get a sense why most businesses are so desperate to stay in the customs union.
Jon Thompson, chief executive of HM Revenue and Customs, told MPs that the extra costs linked to having to set up a new customs operation would cost £500-£800 million, with a minimum of 5,000 new customs officers being hired to be paid by the UK taxpayer.
That is a sizeable sum to pay for quitting the customs union, but a much bigger price could be paid in Ireland, where the border represents more than just an interface between two trading regimes.
In 1956, Irish nationalists launched their so-called ‘Border Campaign’ which led to 18 deaths before it wound down in the early 1960s. The Troubles, which erupted later in the decade, again saw customs border posts become a target for violence – and saw them morph into army checkpoints.
Any move to restore the physical border would be an inflammatory one, and it is the height of irresponsibility for any British politician to put at risk peace in Ireland just to pursue an obsession with leaving a workable customs union.
Britain lies 15th in the EU league table of exports per capita. Germany trades more than four times as much as the UK does with China and does so from within the customs union and single market. It is untrue the UK needs to leave the customs union to improve exports. There is no bilateral free trade agreement in the world which covers services – banking, universities, cultural and creative industries, design, legal services, insurance – where Britain enjoys a handsome balance of trade surplus with the EU. This will be lost outside the customs union and single market.
The only putative free trade deals Liam Fox has managed to talk up involve Australia dumping its hormone-altered meat, putting UK farmers at risk; America demanding its chlorinated chickens can go on sale here; and India saying the price of any trade deal means 1.3 billion Indians – more than twice the population of the EU – being allowed easier access to Britain.
Switzerland is neither in the EU nor the customs union. Yet the Swiss accept freedom of movement to keep access to the single market.
In February 2014, the Swiss voted in a referendum, organised by anti-European political groups, to ban freedom of movement. Quickly, businesses and organisations in sectors like health care, construction, tourism and retail realised they could not survive without EU workers. 26% of the Swiss population is immigrant, mainly from the rest of Europe. So MPs took charge of the referendum and brought in measures to support more employment for Swiss citizens – as we could do in the UK by reforming our internal labour market – and just quietly binned the 2014 referendum result in favour of a proper solution to a perceived problem.
Now that really is something we can learn from Switzerland.