Theresa May proposed on Thursday a “backstop” solution for a post-Brexit-customs regime regulating UK-EU trade. The bottom-line is that if negotiations were not to be concluded, which seems likely, the British prime minister wants to have in place a regime that will allow Ireland to retain an open border.
What is a “backstop”
Until recently, “backstop” was a reference to the UK’s government commitment in December 2017 for a customs solution that would help to secure an open border in Ireland even if negotiations failed. The scope of this regime now widens.
The agreement was to retain the current status quo of a customs union in Northern Ireland,, effectively shifting the UK border for trade purposes to the Irish channel. The backstop solution was introduced to shield the 1998 Good Friday Agreement that commits the UK to support the internal market and the customs union underpinning North-South cooperation.
However, the Democratic Unionist Party has vetoed this backstop solution, making clear that they would be unwilling to accept a regulatory barrier between Northern Ireland and the rest of the UK. At a press conference in Sofia on Thursday, Theresa May suggested that the whole of the UK could maintain regulatory alignment if trade talks fail.
More specifically, the backstop solution would entail the UK agreeing to a common external tariff on goods coming to Europe. And the UK would continue to collect tariffs for the EU. In sum, the status quo will remain in place.
However, Theresa May is keen to appease her backbenchers, if Brussels provides scope for maneuvre.
London wants to avoid European Court of Justice continued jurisdiction in arbitration during this period. How that would be possible remains unclear. Moreover, the UK wants to be able to make its own trade deals, although these will not come into effect before the UK signs its final trade deal with the EU.
ECJ jurisdiction is hard to negotiate, although trade negotiations that do not come into effect are acceptable in Brussels.
What is clear is that neither Ireland nor the UK have the infrastructure in place for customs checks. And such infrastructure will not be in place prior to December 2020, when the transition period will expire.
Ms. May’s preferred solution is a “customs partnership.” That solution envisages the UK maintaining regulatory alignment with EU without recognizing European Court of Justice Jurisdiction. In this scheme, the UK would also retain the right to sign its own trade deals but would collect tariffs on behalf of the EU. The scheme is dismissed as “cretinous” by a group of no less than 60 Brexit hardliners in parliament, led by Jacob-Rees-Mogg.
Brexit Secretary David Davies has promised more detail to come in a 100-page white paper to be published in the next few weeks, which will detail a policy alternative. Hardliners insist that a so-called “Max-Fac” (Maximum Facilitation) scenario is still possible, in which Ireland will have a seamless border with cameras alone.