UK, EU take tentative steps toward a backstop compromise

Officials say the EU is offering to put a temporary UK-wide customs arrangement into the Withdrawal Agreement.

LONDON — Brussels is prepared to write a new clause into the Brexit divorce agreement allowing for a legally enforceable, U.K.-wide customs arrangement to give London certainty that the Irish backstop will never be used, two senior officials familiar with the negotiations said.

In the House of Commons Monday, Theresa May said the EU has “responded positively” to her proposal for a U.K.-wide “customs solution” to the last remaining hurdle in the way of an orderly British withdrawal.

However, the prime minister said the EU has told her there is no time left to work out the details of the proposal, suggesting it would have to be agreed as part of the future relationship negotiations, the broad aims of which will be set out in a legally unenforceable “political declaration” that sits alongside the divorce agreement.

This, however, would leave the U.K. with no legal certainty that it could stop Northern Ireland being forced into separate arrangements from the rest of the country, as envisaged in the EU’s backstop proposal.

In the Commons, May also revealed the EU is still insisting its original backstop remain in the withdrawal text, potentially keeping Northern Ireland in the EU’s customs territory after Brexit “unless and until” a new arrangement can be found.

By offering to put a temporary U.K.-wide customs arrangement into the Withdrawal Agreement — effectively keeping the entire U.K. in a customs union with the EU until the new trade and customs deal is ready — London can claim legal certainty that should a future trade and customs deal not be ready at the end of the transition period (planned on December 31, 2020), Northern Ireland would not fall into a separate customs zone to the rest of the U.K.

The offer is a small but significant step toward a breakthrough in the negotiations, which all sides admit remain uncomfortably close to permanent impasse over the status of Northern Ireland.

However, even if the EU firms up its commitment to a new clause in the withdrawal agreement, significant political problems remain.

First of all, Downing Street is concerned that even with a legal commitment for a temporary customs arrangement, unless the details are fully worked out there would still be an “imbalance” between this commitment and the EU’s detailed and legally enforceable backstop that applies only to Northern Ireland, which would make this difficult for the PM to sell to MPs. The U.K. needs this commitment to be hardened up considerably before it is deemed acceptable, one senior U.K. official said.

Second, as May confirmed to MPs Monday, even with such a clause written into the Withdrawal Agreement, the U.K. could not accept the EU’s original, Northern Ireland-specific backstop because the new offer would be “temporary,” meaning there remains a risk that if negotiations break down then Northern Ireland could be forced into the backstop at some point in the future.

To ensure this is not the case, the EU is demanding that the “temporary” bridge be indefinite in length — something Conservative MPs insist is unacceptable because it could mean the U.K. remaining trapped in a customs union with Brussels indefinitely.

Despite the problems, however, officials — one U.K. aide familiar with the state of the negotiations and one high-level EU27 diplomat — said there remain reasons for optimism that a route through the impasse could be found.

First, according to both officials, the U.K. and EU are working on “criteria” that could be written into the clause that, once met, would allow the temporary customs arrangement to be replaced by the new trade deal when it is ready. Both sides would need to agree the criteria and come up with an independent mechanism to rule when such criteria have been met.

At a briefing for journalists in parliament Tuesday, the prime minister’s official spokesman confirmed such a mechanism has been a subject of discussion at Cabinet.

“They discussed the need for a mechanism to clearly define how that backstop will end,” he said.

Asked if this would also include a date for “when” rather than “how” this temporary customs arrangement would come to an end, the spokesman said: “How and when essentially deliver the same point of the need to ensure that [the backstop] is not indefinite.”

The EU27 diplomat who spoke to POLITICO on condition of anonymity saw another more fundamental reason for optimism — that if the EU accepts the principle of a U.K.-wide customs arrangement in the Withdrawal Agreement, why shouldn’t it supersede the backstop itself?

“You’d have to say, if they [the Commission] are prepared to accept the principle of U.K.-wide it doesn’t seem to be a long step,” the official said. “It could only happen at the very end though. The leaders have not had to confront a situation of absolute disaster yet.”

In Brussels Tuesday, European Council President Donald Tusk appeared pessimistic about the chances of progress at this week’s summit. “Tomorrow I am going to ask Prime Minister May whether she has concrete proposals on how to break the impasse,” he said. “Only such proposals can determine if a breakthrough is possible.”

He added: “Unfortunately the report on the state of the negotiations that I got from Michel Barnier today as well as yesterday’s debate in the House of Commons gives me no grounds for optimism before tomorrow’s European Council on Brexit.”