Northern Ireland will in effect remain in the EU's customs union and single market to avoid a hard border post-Brexit if no wider EU-UK trade deal or alternative is agreed, the draft withdrawal agreement will state.
EU sources said the draft agreement from Brussels covering the UK's withdrawal from the bloc in March 2019 – to be published in Brussels on Wednesday – will maintain a common regulatory area on the island of Ireland.
This will be triggered should the EU and the UK not agree a future EU-UK free trade deal or if London fails to propose an alternative arrangement for the Border post-Brexit.
The delicately crafted text provides a legal foundation to the December agreement, including its third and final “backstop” option guaranteeing – in the absence of the first two options – regulatory alignment North and South of the Border.
The focus of the draft agreement will be on this option given that the first two depend on solutions from Theresa May’s Conservative government, which it has so far failed to propose due to internal divisions.
The draft agreement will stress the importance of maintaining a single regulatory space on the island of Ireland that will essentially mean that a customs union and parts of the single market that affect free movement of goods, services and people applying to Northern Ireland to maintain an open border.
The EU’s draft text will be subject to negotiation with the UK government.
The deal covering Ireland will be contained in a protocol attached to the withdrawal agreement but with the same legal standing.
Part of the draft – seen by The Irish Times – says that the backstop scenario will maintain full alignment "with those rules of the union's 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 [Belfast] Agreement."
Separate provisions will be spelled out in the draft agreement to cover agriculture and food to ensure two key sectors impacting businesses on both sides of the Border are not affected with different rules and procedures being applied North and south. EU law on animal health will also be applied on the island.
Minister for Foreign Affairs Simon Coveney said on Tuesday that the Government's priority was to translate the December political agreement into "new draft legal text."
He said: “We want to work with the UK and defend island of Ireland interests.”
The draft agreement is likely to create tensions between the DUP and the Conservatives, which is in power with the support of the Northern Irish party, as it will not cover Mrs May’s commitment to the DUP that there would be “no new regulatory barriers” between Northern Ireland and the UK.
‘Cause some ruffles’
Former taoiseach Bertie Ahern predicted that the draft text would "cause some ruffles" amongst the DUP and hard Brexiteers within the Conservative Party, but said that all the parties who said that they wanted to maintain an open border could not reject the legal text as that was what it guaranteed.
"Everyone spoke about wanting a frictionless border. What we are getting is a frictionless border. Those who moan about it will be getting what they asked for," he told The Irish Times.
Without the same regulatory system North and South there would be “a border with customs posts and all the bells and whistles”, said Mr Ahern.
“I don’t think people who are complaining about that are being fair. You can’t say you want a frictionless border and no customs, and say that you don’t like the legal text.”