Analysis: Britain has accepted ‘customs union-lite’ for North

Language over which talks stumbled an important shift in UK thinking

UK prime minister Theresa May and Donald Tusk, president of the European Union, in Brussels on December 4th, 2017. Photograph: Dario Pignatelli/Bloomberg

There was some bewilderment in Brussels on Monday night when Jean Claude Juncker announced that his lunch with Theresa May had failed to produce the breakthrough that all expected. True, we had been warned that we should not take success as a fait accompli. There were still hurdles to be overcome, and both sides were playing hardball. And so it proved.

Whether the job will be done on Wednesday is unclear, but it does appear unlikely that the UK will be able to come up with a substantially different formula on the Border from that which it had signed up to but ultimately repudiated.

The "absolute deadline" which European Council president Donald Tusk had spoken of has gone the way of so many EU "deadlines".

The disappointment is palpable. In Brussels as much as London there is a strong desire to move to the second “future relationship” phase of talks with the UK. Not that they will be any easier, and for Ireland there is as much politically – more economically – at stake.


And time, as EU chief negotiator Michel Barnier keeps reminding us, is running out – the UK leaves in barely 15 months.

Dublin is close to achieving several major diplomatic objectives – most notably safeguarding the frictionless Border and the many elements of the Belfast Agreement – while, most impressively, harnessing the remarkably unwavering support of 26 fellow member states.

Whether such solidarity with Ireland’s plight can be preserved in the trade talks that will probably now start in January will be the central concern of Irish diplomats.

Regulatory alignment

The language over which the talks stumbled on Monday represents an important shift in the UK thinking.

In agreeing to maintain “regulatory alignment” on the island of Ireland – as opposed to a stricter rejection of “regulatory divergence” – the British government has accepted a form of “customs union-lite” for the North.

But it has also given itself leeway to argue that it is not proposing simply to replicate regulations agreed in Brussels verbatim. It will instead impose and maintain what is termed in Brussels an “equivalent” regime whose standards are as high and enforced as rigorously as the EU’s own. But independent, and presumably managed by the devolved Assembly in Northern Ireland.

That notional degree of regulatory independence, London may have believed before DUP leader Arlene Foster’s intervention on Monday night, should suffice to placate anxious unionists, although the implication of the arrangement is clearly a form of the dreaded Border down the Irish Sea.

There are already some controls on agricultural products moving between Britain and Northern Ireland. If the formula proposed remains intact these will now have to be strengthened and extended to cover all other traded products from car emission standards to drug approvals.

Special entity

From a Southern perspective, a Border deal at this stage which treats the North as a special entity apart from the rest of the UK – and requires a Border down the Irish Sea – leaves the huge post-Brexit challenge of east-west trade unresolved. That trade dwarfs by a factor of five-to-one North-South trade, and the potential imposition of tariffs and controls on exports to Britain is enormously worrying to industry and farmers.

But it was always too much to hope that the east-west challenge could be resolved in phase one.

The substance of what has been agreed, and appears likely to be agreed , on Ireland is nevertheless important. Apart from the formula for how the “frictionless” Border will be maintained, there is also a British commitment to maintaining the Common Travel Area between Britain and Ireland, and to safeguarding the Belfast Agreement “in all its parts”. That involves promising to keep going and in some cases continue funding 142 cross-Border bodies or programmes.

Irish citizenship

The right of Northern Ireland citizens to Irish citizenship – and hence EU citizenship – has also been confirmed.

Next week’s EU summit outcome remains in doubt. But if the talks resume successfully on Wednesday it should, as everyone hopes, be able to agree quickly to the opening of talks as early as January on the “future relationship”, and may even approve a new mandate for the commission negotiating team for those talks.

At which point Ireland’s second diplomatic offensive begins.