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The big ‘customs union’ reveal

As Labour leader, Jeremy Corbyn delivered his highly anticipated speech on access to the single market on Monday advocating that the UK be part of a bespoke customs union with the EU after the transition period, but he may not have anticipated how it would resonate in Welsh political circles.

Just hours before Corbyn’s speech, the first minister, Carwyn Jones – who supports a continuing customs union arrangement and has previously called the prospect of leaving it “economically daft” – spoke to reporters ahead of a visit to the US and Canada to express support for “developing a free trade agreement between our countries.” On landing in Washington, he added that trade deals should be handed at a European level, a pivotal element of what Jeremy Corbyn advocated in his speech, with the UK playing an active role.

As if by magic, Plaid Cymru tabled a motion on the customs union in the Senedd on Wednesday, asking AMs to support continued membership of the (existing) customs union.

The motion was matched by two amendments: one from the Welsh Conservatives, advocating a new customs arrangement and the ability to enter new international trade agreements; one from the Welsh government, supporting the UK’s continued participation in the single market and in a customs union with the EU.

Winning the battle of the numbers on the night, the government’s amendment succeeded, an indication that Corbyn’s speech may have gone some way to alleviating the concerns held by some in his party that its leadership was lacking a clear Brexit policy.

Carwyn on a commerce drive

While Carwyn Jones continues to state his disagreement with the prime minister’s mantra that ”no deal is better than a bad deal”, his tour of North America could illustrate his appreciation of a need to develop Welsh government ties with international markets that may become even more important should the UK end the two-year Brexit transition without a EU trade agreement in place.

Lauding the US as “Wales’ most important business partner,” the first minister said that “exciting opportunities for trade with North America lie ahead,” and he was keen to reassure US investors and visitors that Wales remains an outward-looking country.

Recent Welsh government analysis suggests that a withdrawal from both the single market and the customs union could leave the Welsh economy worse off by up to 10%, with the manufacturing, steel and aerospace sectors likely to be the hardest hit. That same research also found “few firms identifying any positive opportunities deriving from the Brexit process.”

A trip to North America makes clear sense. After all, Europe aside, it is Wales’ second largest export market, worth just under £2.5 billion in exports in 2016 and overshadowing exports to Asia which were worth £1.4 billion. His visit also comes hot on the heels of Welsh Secretary of State Alun Cairns’ trip last month to the economic powerhouses of the Eastern Seaboard.

The transatlantic efforts of Messrs Cairns and Jones are part of a wider trend. In these uncertain economic times, the UK and devolved governments have ramped up their work to court prospective and existing trading partners - the international trade secretary, Liam Fox, has, for example, visited an impressive 40 countries since the EU referendum.

Continuity

All the while, the threat of both the Welsh and Scottish governments vetoing the Brexit bill remains.

Though all sides have reported progress in the on-going discussions on where powers should sit immediately after the UK’s exit from the EU, there hasn’t been enough to form an agreement. Cue the Welsh government’s announcement to put a ‘Continuity Bill’ before Assembly Members next week as an emergency measure which, if passed, would place issues such as farm subsidies and food labelling into Welsh law.

The political arithmetic of this move is interesting in its own right, as it has the backing of Plaid Cymru and Ukip, but not the Welsh Conservatives, who say their colleagues in Westminster understand that leaving the EU should “not undermine the devolved settlement.”

At Prime Minister’s Questions this week, Theresa May was put under pressure on the issue from both Scottish and Welsh MPs and, in response to a question from Plaid MP Jonathan Edwards suggesting that the Withdrawal Bill would “drive a sledgehammer through the Welsh constitution,” she referred to the Continuity Bill as “unnecessary,” insisting, as before, that “far more powers” would be handed to the devolved administrations.

With the devolved administrations set to meet again with UK government representatives next week - presumably, if the current severe weather permits - there is little doubt that Brexit will continue to dominate Wales’ political headlines.

‘Brand Wales’ is alive and kicking

It would be remiss of me not to note the special occasion of St David’s Day yesterday. I was delighted to have attended functions at the Wales Office and Downing Street, which celebrated Welsh culture, produce, talent and industry. We have much to be proud of in Wales and it was great to see this showcased on such a high-profile platform.