A tentative, technical Brexit deal between the European Union and Britain was nearing conclusion on Wednesday evening, which appeared to have the backing of the British cabinet. By late evening, the deal seemed less likely and by Thursday morning it was clear that it would not be acceptable to the Democratic Unionist Party (DUP).
London has conceded regulatory alignment and customs union of Norther Ireland; Brussels has apparently conceded the renewal of consent for this regime by the Northern Irish Assembly every four years.
In Brussels, there are still certain elements of negotiation regarding VAT. It appears that Northern Ireland will remain on the EU’s VAT area, which is seen as vital for uninterrupted North-South trade. The stumbling block remains VAT arrangements between Northern Ireland and the UK.
That is what appears to ruin the deal. In a statement released on Thursday, the DUP leadership could not consent to what appears an effective border shift to the Irish Sea.
“We will continue to work with the Government to try and get a sensible deal that works for Northern Ireland and protects the economic and constitutional integrity of the United Kingdom,” reads the DUP statement.
The support of the DUP is crucial to Boris Johnson for two reasons: first, there is a numbers game, as he needs to convince a number of people in and around the Conservative Party to pass the deal through parliament; secondly, many Conservative MPs have made their support conditional to that of the ultra-conservative DUP.
Brussels and London to be near an agreement on what the EU calls a “level-playing field,” that is, measures that would prevent the UK from undercutting social protection, the environment, and labour regulation. In sum, the deal is near enough complete.
EU27 ambassadors were briefed by EU chief negotiator Michel Barnier on the state of play in the negotiations on Wednesday evening. In a briefing to the Brexit parliamentary committee on Wednesday, Brexit Secretary Stephen Barclay said that the UK government will abide by legal requirements to write a letter to the EU requesting a Brexit delay if a deal is not reached by October 19.
Negotiating teams are working on the assumption that a legally binding text will be ready before the EU Summit.
Johnson has repeatedly said that the U.K. will leave on or before Oct. 31, insisting that he would “rather be dead in a ditch” than ask for a third extension to the Brexit deadline. The UK is due to leave the EU at 23:00 GMT on October 31.
Meanwhile, the Chairman of the US House of Representatives’ Ways and Means Committee, Richard Neal, issued a fresh warning on Wednesday that the UK should not expect a trade deal with the US if Brexit leads to the return of a hard border. The committee will oversee any future trade deal between the US and the UK.
Congressman Neal added they are happy to do a bilateral trade agreement but the border must be kept open, in line with the provisions of the Good Friday Agreement.