London’s dithering means messy ‘no deal’ Brexit still possible
Brussels adamant that withdrawal agreement must be approved by UK in June for talks to go on
The EU-UK discussions on the future of the Border are taking place in two separate strands of the Brexit talks.
First there are the “divorce” talks on the withdrawal agreement.
Second are the “future relationship” talks, which will focus on post-Brexit trade between the European Union and United Kingdom once the transition is over.
Last August, when the UK published its negotiating paper on customs options, the presumption was that the issue would be dealt with on an all-UK basis – no special treatment for Northern Ireland – and the British put two alternative proposals on the table.
Option one: The “highly streamlined customs arrangement” would reduce border controls by using technical measures to monitor and track goods crossing the EU border, as well as schemes like the “trusted trader” arrangements and small business exemptions.
Option two: The “customs partnership” arrangement would see the UK acting as the external border of the EU by continuing to levy EU duties on goods entering from third countries and then providing rebates to those goods which remained in the UK.
These two options remain the basis of their position, though it appears the British cabinet is fiercely divided on which one it wishes to promote. EU negotiators and Dublin have insisted from the start that neither option is workable.
Option two, which appears to be favoured by prime minister Theresa May, would involve the close tracking of goods through the UK market, a customs procedure which has never been tried before.
It would, in theory, allow goods crossing UK-EU internal borders, including into and out of Ireland, to do so with minimal customs checks as they have already been assessed for duties (although there is also the not-insignificant matter of checking that goods meet EU regulatory standards).
Both approaches were seen as matters for the “future relationship” talks. But before those could even begin, the EU wanted to reach an agreement on separation issues – the withdrawal agreement – which would deal with the UK’s divorce Bill, the rights of EU and UK citizens remaining in both jurisdictions, and, crucially, a post-Brexit copperfastening of the Northern Ireland peace process and Belfast Agreement.
Central to safeguarding the peace process was a commitment by both sides to a “frictionless border” on the island. And in December, to assure the EU that “sufficient progress” was being made in the talks, the UK signed up to three alternatives for the Border.
The first two are as above, the third is the “backstop”. This is a fallback guarantee that if the broader talks between the union and the UK fail to come up with an all-UK solution, then London would promise to treat the North as a separate entity in which it would maintain “regulatory alignment” with the EU so that goods would not need to face border checks.
The December accord spells out that: “In the absence of agreed solutions, the UK will maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South co-operation, the all-island economy and the protection of the 1998 Agreement.”
It means that in effect the North would remain part of the Customs Union (a group with common trade tariffs that includes most but not all EU states, and some non-EU states). In these circumstances, trade between it and the rest of the UK would have to undergo customs checks on the Irish Sea.
Belated realisation of that reality, prompted by a visceral DUP reaction to it, seems to have caused London to back off describing any means of “operationalising” the offer.
The guarantee was nevertheless translated by the EU into the withdrawal agreement in language that the UK has yet to agree: “With respect to the draft protocol on Ireland/Northern Ireland, the negotiators agree that a legally operative version of the ‘backstop’ solution for the Border . . . should be agreed as part of the legal text of the withdrawal agreement, to apply unless and until another solution is found.”
Without an agreement on the withdrawal agreement in June, however, the bloc is adamant that the “future relationship” talks will have to cease, jeopardising not only the trade treaty, but also the deal on transition.
For now, London appears to have decided it can long-finger the “backstop” option in the withdrawal agreement divorce talks. This seems to be based on the hope that a deal in the “future relationship” discussions, perhaps on the basis of a “partnership” model, would make the need to agree a backstop redundant.
But internal divisions in the Tory Party mean May can’t even spell out her case for partnership.
Unless London comes up quickly – there are three negotiating sessions before the next EU summit at the end of June – with a means of breaking the deadlock on the Border in both strands of the talks there is an increasing possibility of a “no deal” and that the UK will fall out of the EU at the end of March next year with a horribly hard bang.
It would in theory allow goods crossing UK-EU internal borders, including into and out of Ireland, to do so with minimal customs checks