How About a Customs Extension? May’s Brexit Team Discusses

There’s a radical new option that Prime Minister Theresa May’s inner Brexit Cabinet has taken into consideration to address the intractable Irish border problem: keeping European Union customs rules for longer.

According to four people familiar with the matter, the 11 Cabinet ministers at the heart of setting Brexit policy spent much of their 90-minute meeting on Tuesday discussing the need for a new plan to ensure there’s no return to frontier checks on goods moving between Ireland and Northern Ireland.

The EU is demanding an insurance clause to make sure no border emerges. But the backstop proposed so far is unacceptable to May so her officials are now working on an alternative backstop idea to be discussed at next month’s summit of EU leaders. The bloc’s last resort is to keep only Northern Ireland inside its customs territory unless or until another solution can be found.

A range of options have been drafted for May’s ministers to consider. One involves still applying features of the Brexit transitional period relating to customs rules beyond the currently planned cut-off date of December 2020.

The idea is that would keep the U.K. aligned with some of EU trade rules for longer, as a backstop plan to avoid a crisis over the Irish border. According to people familiar with the matter, this idea has now made its way up to the most senior levels in May’s Cabinet, with some members believing it has potential to resolve the impasse.

Will Brussels Embrace?

Whether negotiators in Brussels like it is another matter. Even if May’s Cabinet agree to the idea, the EU is highly unlikely to accept it as an alternative to its own plan for a backstop for Ireland, according to a person familiar with the bloc’s negotiating position.

Brexit negotiations are stuck on the question of the Irish border as the EU waits for the U.K. to come up with more ideas.

May wants to solve the question of how to avoid a hard border by negotiating a sweeping new commercial agreement with the EU that avoids the need for arduous goods checks and tariffs, while setting the U.K. free to develop its own independent trade policy.

But the EU says an insurance policy for Ireland must be agreed first in case the U.K. free trade deal doesn’t work out as planned.

May’s Riddle

May has rejected the idea, which would effectively put a new border between Northern Ireland and the British mainland. She’s said no British prime minister could ever allow such an outcome.

May’s dilemma is how to resolve tension between leaving the EU’s customs union in order to win the freedom to strike trade deals with countries outside the bloc, while at the same time avoiding the need for border checks on the frontier with Ireland.

There is still a lot of work to be done on the potential options for solving the issue and the idea of extending the EU’s customs rules beyond the transition period has not been officially agreed, people familiar with the matter said.

May has been clear repeatedly that the U.K. will leave the EU customs union although some of her officials think any new customs arrangements won’t be ready in time for the end of the transition period in December 2020.

Any extension of EU customs rules — particularly if there’s no cut-off date — would spark a backlash among Brexit campaigners in May’s Conservative party. Some of them have privately warned she will face a challenge to her leadership if she tries to tie the U.K. too closely to the EU’s rules.

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