Britain sticks with magical thinking on Brexit Border issue

Cliff Taylor: UK attitude on customs now threatens collapse in talks

The UK has said the Border issue can be solved only in the context of future trade talks. Photograph/Paul Faith/AFP/Getty Images

The UK has said the Border issue can be solved only in the context of future trade talks. Photograph/Paul Faith/AFP/Getty Images

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Conservative pro-Brexit MP Bernard Jenkin was on RTÉ’s News at One on Friday . It was not “beyond the wit of man”, he said, to come up with a solution to the Irish Border problem post-Brexit. Which begs the obvious question. Why has the UK government been singularly unable to do so?

Jenkin followed up with the usual Tory “Irish Border” mumbo-jumbo. Experts had identified ways a border could be avoided, he said. They haven’t. Other models could be looked at, such as Norway/Sweden or Switzerland with the European Union. Technology could help. Ask your own Government, he advised us, as he got into the swing, do they plan to build a border after Brexit because the UK government doesn’t – and it won’t be necessary. This would require ignoring the entire body of world trade rules – but never mind.

It was a masterclass in magical thinking. And the UK government may not be too far ahead, still sticking to proposals which its former ambassador to the EU says are judged in EU capitals as “a fantasy island unicorn model”.

Customs union

The Brexit crunch is coming. The European Commission has repeatedly told the UK that the plans it has put forward on customs after Brexit will not cut it, a point repeated in talks this week.This means the only way to avoid customs controls both between the North and the UK and on the island of Ireland – the goal to which the UK government aspires – would be for the UK to form a customs union with the EU after Brexit.

The EU customs union allows tariff-free movement of goods across the EU and common treatment for goods arriving from third countries. There is now a live debate in London about whether the UK should be in a customs union with the EU after Brexit. It would help UK businesses, lower the economic damage and help solve the Border dilemma.So far Downing Street is saying that the decision to leave the customs union stands, though who knows what language games could be deployed to decide a U-turn in the months ahead.

If London does not agree to move in the direction of a customs union, there will be a big row and a possible breakdown in the talks, at least for a period. In the “nothing is agreed until everything is agreed” world of the Brexit talks, this is high-stakes stuff, as it would also endanger the transition agreement, the standstill which will be put in place to mean chaos does not hit the day after the UK leaves at the end of March next year.

For Theresa May there is trouble whatever way she turns. If she signs up for a customs union following Brexit, then she is giving up on the idea of the UK being able to do its own trade deals with third countries after Brexit, or at least – even with a partial customs union – severely restricting it.

There is some political support in London for the customs union option. The House of Lords this week voted in favour of an amendment to the EU Withdrawal Bill, calling on the government to outline steps for a new customs union with the EU. Senior MPs put forward a Commons motion with a similar goal. But the UK is deeply split and the pro-Brexit lobby could see a reversal on the customs union as one too many red lines crossed.

Against the backdrop of this UK political split, the EU side will keep pushing the UK to to flesh out the so-called backstop and agree to all the details. This is designed to ensure no hard border on the island of Ireland after Brexit, if no other solution emerges and would involve the North having a special economic status. However, May has said that no UK prime minister could sign up to this, as it would involve new trade barriers between the North and Britain. This is also a complete no-go area for the DUP.

How far will the EU negotiators push the UK on the backstop details in the run-up to June? That will be one of the key things to watch and the Government has now invested significant political capital here too.

Trade talks

The UK has said the Border issue can be solved only in the context of future trade talks. But even here it is complicated. An EU/UK customs union on its own would not guarantee completely free trade between Ireland and the UK, nor the absence of a hard border on the island. This would also require alignment of rules and regulations covering trade in goods, as set down in the EU single market, meaning checks would not be needed at borders.

There are huge negotiating challenges, even if the UK showed willing to explore some kind of customs union. These include who would oversee a new customs union, the role of the European courts and whether it is practical for the UK to diverge in some areas from EU rules and regulations over time. Also, the EU side may object to the idea of the UK being in part of the single market but not all of it. As well as goods, the single market secures free movement of capital, people and services.

For Ireland, a UK commitment to the customs union would be a big step forward, particularly if it was accompanied by a commitment to maintain a single market on the island for the agricultural sector. But we are a long way from that yet. The issue is now clarifying itself and presenting London with a decision. If it holds hard to its commitment to leave the customs union, logic suggests we are heading, sooner or later, for a breakdown.

Whether this comes in the run-up to the June summit or during the autumn is open to question. Politicians have a great ability to fudge their way along, but sooner or later the moment of truth is reached.

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