Lack of trust between EU and Britain emerging as issue in backstop talks

London Letter: Fears Britain could seek to use Border issue for trade deal leverage

This was supposed to be "hell week" for Theresa May after mutinous Brexiteers foretold her political assassination in grisly metaphors in last Sunday's papers. But after surviving a Brexit statement in the House of Commons on Monday, a fiery cabinet meeting on Tuesday and an appearance before the 1922 Committee on Wednesday, the prime minister ends the week in a stronger position than she began it.

But May still faces the challenge of agreeing a Brexit deal with the EU that is acceptable to her cabinet, her party and to parliament. Negotiators on both sides have had informal contacts this week but the EU will not restart formal negotiations until Britain is ready to come back with a proposal to break the deadlock.

The prime minister's statement on Monday, when she set out four tests for a deal on the Northern Ireland backstop, persuaded backbench Brexiteers that she was hardening her position in the negotiations

The prime minister's statement on Monday, when she set out four tests for a deal on the Northern Ireland backstop, persuaded backbench Brexiteers that she was hardening her position in the negotiations.

Downing Street sent out a similar message, signalling that May was ruling out any Northern Ireland-specific backstop appearing in any form in the withdrawal agreement.


The backstop

What she said was that “we must make the commitment to a temporary UK-EU joint customs territory legally binding, so the Northern Ireland-only proposal is no longer needed”. She also insisted that neither the temporary customs arrangement, an extension of the transition period nor the backstop itself could last indefinitely.

The EU agrees that the temporary customs arrangement and the transition period must be time-limited, not least because the European Court of Justice is likely to rule that anything else is unlawful.

The backstop, on the other hand, is an insurance policy that must, in Michel Barnier’s phrase, be “all-weather” and must remain in place “unless and until” a permanent solution is found to ensure that the Border remains open.

The EU remains firm in its demand that the Northern Ireland-only backstop must remain in the withdrawal agreement and that a UK-wide customs arrangement cannot replace it but can mitigate it.

When they met in Salzburg last month, EU leaders expressed concerns about a customs arrangement that would allow British goods free circulation around the EU without Britain having to comply with EU environmental and other standards.

Turkey’s customs union

An ambitious free trade agreement could make many elements of the backstop unnecessary through measures such as a comprehensive veterinary agreement and customs facilitation. Both sides are looking at an improved version of Turkey’s customs union with the EU which would remove some of the asymmetries that disadvantage Ankara.

At the heart of the dispute over the backstop is the issue of trust, with the EU asking Britain to agree to a legally binding Northern Ireland-specific backstop with the promise of a UK-wide version in the political declaration.

Attorney general Geoffrey Cox, who has emerged as the cabinet's Grand Brexit Poohbah, wants a stronger legal guarantee and the final stage of the negotiations will centre on how to reconcile the two positions in a legal text.

EU negotiators are willing to come up with language that offers reassurance of their good faith and with compromises that make the backstop more acceptable to Britain. But in the political environment at Westminster, there is no guarantee that such compromises would persuade sceptical MPs to back a Brexit deal that includes the backstop.

Brexit fatigue

When EU leaders discussed Britain’s departure over dinner in Brussels last week, they were happy to continue delegating the negotiations to Barnier. This is partly an expression of Brexit fatigue, which may also explain why the leaders are relatively relaxed about the prospect of a no-deal Brexit.

European businesses are less sanguine about the economic cost of a cliff-edge Brexit next year without the buffer of a transition lasting at least 20 months. If negotiations resume after budget votes at Westminster next week, a special summit could be convened in late November to sign off on a deal.

If November slides into December, pressure for a deal could raise the question of whether the backstop has to be in the withdrawal agreement. Instead of asking Britain to trust the EU, could Ireland be asked to trust both Britain and the EU to deliver a guarantee against a hard border as part of the future framework?

There is no sign that other member states would agree to such a change of sequence, partly because of solidarity with Ireland but chiefly because they fear that Britain would seek to weaponise the Border in the next stage of negotiations to gain competitive advantage in a future trade deal.