Are Customs Unions Tenuous Arrangements?

June 29, 2011 — Leave a comment

Recent reports from Europe suggest all is not entirely well with the ‘customs union’ concept. Let’s face it the philosophy of such economic arrangements has existed for many years. However, human nature and the failure of politicians to learn from history prevail.

On the one hand we have Russia, Belarus, and Kazakhstan entering a new customs union on 1 July 2011. At the same time, Russian Customs will become responsible for transport, sanitary, veterinary, quarantine and phytosanitary control. The impact of this change foresees the displacement of national border controls to the outer borders of the new Customs Union. 35 customs checkpoints and approximately 3,500 customs officers will be made redundant following the implementation of the Customs Union. To take control of the additional functions (transport, sanitary, veterinary, quarantine and phytosanitary control) Customs will need to recruit over 1,000 new specialists. Customs will try to close the gap by a short-term redeploying of personnel, but in the future expects to employ some specialists previously made redundant in other governmental agencies responsible for transport, sanitary affairs. This sounds a bit ludicrous given that 3,500 customs officers are about to be turfed into economic oblivion – truly, the interests of customs staff are not very high on this agenda!

Denmark border crossingElsewhere, tension is developing between Denmark and Germany in a dispute over the Danish government‘s plans to re-establish permanent border controls – this in the EU. Some commentators have even gone so far to state that this could be the writing on the wall for freedom in Europe. The agreement guarantees the free movement of people between the 26 European member states. Denmark insists that the sole aim of the new border controls was “to fight the entry of illegal goods and drugs” into the country.

So, is the dream of a united Europe showing signs of cracks? It seems that the scourge of illegal goods and trafficking have placed some strain on the trust between these two nations. How long before it spreads to other states? At home, here in Southern Africa, there have been several reports of tension between the Republic and the BLNS states. Although the basis for this lies more in the distribution of the common revenue pool, it is no secret that the Southern African Customs Union (SACU) and its porous inland borders offers little support for maintaining the union. With the new Customs Control Bill emphasizing the movement of goods within the union as ‘imports’ and ‘exports’, it would indeed seem a matter of time before full customs controls are reinstated at the national borders rather than current VAT controls.

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