How a ‘Customs Union’ Could Define Post-Brexit Trade

Having failed to get her Brexit deal through Parliament, U.K. Prime Minister Theresa May is in talks with opposition Labour leader Jeremy Corbyn to find a compromise on how Britain should trade with the European Union after their split. Remaining in a customs union could be part of the solution. May’s unloved deal already came close to a customs union, though she’s never described it that way. Corbyn, meantime, wants a customs union with modifications to give the U.K. a say in its future trade deals. The main attraction of a continued union is that it would keep goods in European supply chains moving tariff-free, averting some of the most destabilizing disruptions of a Brexit split.

It’s an agreement among a group of countries for goods to move freely among them, without tariffs. Those members agree to align certain regulations and impose the same "external" tariffs on goods imported from nations that aren’t a part of the union. That way, once goods enter the bloc, they can be moved without further checks. The setup greases trade flows and provides leverage in negotiating trade deals with the rest of the world.