UK's plan for customs union 'backstop' faces tests in Brussels


  • UK plans to remain tied to customs union to avoid Ireland border
  • Brussels wants Northern Ireland-specific solution
  • EU fears cherry picking by UK and threat to single market

Britain’s emerging plan to avoid a hard border in Ireland is based on an idea that has long made the EU’s Brexit negotiators uneasy.

Applying the so-called “backstop” arrangement to the entire UK, rather than just Northern Ireland, poses a double-edged challenge for the union’s 27 remaining member states.

On the one hand the plan has appeal. It can solve the border conundrum in Ireland while also providing continuity for European business, effectively tying the UK to the EU’s regime for customs and goods beyond 2021. “Some [leaders] will be tempted, no doubt,” said one senior eurozone government official working on Brexit.

But such a UK proposal would also directly contradict some core tenets of the EU’s Brexit strategy. At best, the plan will be a hard-sell in Brussels; at worst EU negotiators say it could bring Brexit talks to crisis-point.

According to Michel Barnier, the EU’s chief negotiator, when it comes to the backstop: “only Northern Ireland-specific solutions will work”.

Legal problems

EU leaders see Northern Ireland as a unique issue, with peace process commitments that must be addressed in Britain’s Article 50 exit treaty.

Lawyers in Brussels have, however, laid down strict limits on what can be included in this exit treaty. It cannot be stretched, for instance, to the point of defining lasting UK-EU trade arrangements. That would require a trade treaty, negotiated after Brexit on a different legal basis.

British officials strongly dispute this assessment, saying that Brussels has already conceded the principle of a backstop including trade provisions. Even if EU leaders took a flexible approach to the law, far from uncommon in Brussels, there is a risk that the European Parliament will veto any exit treaty, or challenge its legality in court.

Cherry-picking

Brussels negotiators say a UK-wide backstop would allow London to carve up the single market to its advantage. “This would be one huge cherry,” said one senior EU official.

This is because the avoidance of a hard border requires not just a customs union, but close regulatory alignment, ranging from product standards to VAT. To Mr Barnier’s team, avoiding checks requires a common regulatory space allowing the free movement of goods.

If offered to the UK as whole, such trade terms would divide the “freedoms” of the single market. London could avoid obligations, for instance, on the free movement of people.

Membership-light

In private deliberations, Angela Merkel, the German chancellor, has repeatedly stressed that any Brexit deal must clearly show the consequences of leaving the union.

For Berlin, the UK-wide backstop might look too much like carrying over the economic benefits of membership. “Every populist in Europe would point and say: we want that,” complained one northern European diplomat working on Brexit.

Single-market integrity

France is already wary of a backstop for Northern Ireland becoming an illicit gateway for UK goods into the single market. Extending it to the entire UK would amplify these concerns, especially if rule enforcement is lax.

Paris’s conditions — full acceptance of single market rules, regulators and courts — would be anathema to British Eurosceptics. Brussels officials also worry that separating goods markets from services provision is hard, potentially giving UK services sector de facto operating right in the single market.

Tight deadlines

While the UK sees the backstop as a time-limited, last resort measure, the EU sees it as a lasting guarantee against a hard border. Any backstop would be negotiated, in other words, as if it might be used indefinitely.

For this reason, broadening its scope to the entire UK could dramatically increase the complexity of Brexit talks, which are supposed to end in October.

It might require, for instance, binding agreement on perpetual UK budget contributions, a question that could take years, not months, to settle. Provisions protecting the independence of the UK, for instance in setting certain goods standards, would further complicate discussions.

Clashing interests

A UK-wide backstop could test the unity of the EU27. Some member states may be wary of a goods-dominated backstop deal that does not cover their priorities in fisheries, aviation or services. EU negotiators fear this would heap special demands on them, causing division and undermining the integrity of the EU’s single market.

Time limits

Downing Street is confident that any backstop would be time-limited, because Britain would seek to reach a trade agreement to avoid a hard border in Ireland and allow for “frictionless” UK-EU trade.

Any UK attempt to include a formal cut-off date for the duration of the backstop would face strong objections from the EU side. Negotiators are considering ways to include review clauses, but Dublin and Brussels say they could not compromise the guarantee provided by the backstop.



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