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 Irish Times - Weekend Review - - NEWS REVIEW - Pa­trick Smyth

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

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