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Courtesy of the Times.
Theresa May is preparing to limit Britain’s ability to strike free-trade deals after Brexit in a significant concession to the European Union aimed at breaking the deadlock in negotiations. The prime minister is ready to propose a “grand bargain”, according to her colleagues, which would keep Britain tied to European customs rules on goods after the transition period ends in December 2020.
No 10 will claim that the UK has left the customs union at this point, but by keeping key rules the ability to agree trade deals would be curtailed for many years. Britain would also accept demands that goods entering Northern Ireland from Britain must meet European standards, with the potential for checks in the Irish Sea.
Downing Street hopes that the concessions will pave the way for a deal on the so-called Irish backstop, which has become a key stumbling block. The backstop would kick in if no agreement is reached during the Brexit transition phase on avoiding a hard border between Northern Ireland and the Republic. The concession is likely to enrage Brexiteers, who will claim that it amounts to staying in a partial customs union indefinitely, severely limiting the scope to sign trade deals with countries such as America, Australia and New Zealand that want access to Britain’s agricultural markets.
Under the government proposals the arrangement would end only when a mutually acceptable technological solution to the Irish border issue was found. This could mean that goods entering Northern Ireland would be electronically tracked to their end destination, avoiding border checks and enabling the correct duty to be paid.
Critically, Britain is expected to accept that this cannot be time-limited and will be implemented only with the agreement of both sides. A government spokesman insisted that any such arrangement would be “temporary”. One senior minister said that Downing Street believed it could command a majority in parliament if it unlocked the talks and brought about a withdrawal agreement and clear statement on a future relationship. “We need to have a conversation about customs,” they said. “We have to move to unlock the talks and that is going to mean compromising on signing comprehensive free-trade deals immediately.”
The move would mean Britain agreeing to maintain EU tariffs on goods and to remain part of the common commercial policy. Downing Street published proposals over the summer for a temporary customs arrangement with the EU that would keep Britain tied to customs rules as part of the backstop. Unlike the new proposals it suggested the plan would be “time- limited”. Any plans will need to gain the support and consent of the DUP. Last night a DUP source said the party would oppose the idea of British goods facing checks at a notional border.
