Hopes still sustained in Ireland and the EU that the UK could yet step back from a “hard” Brexit have been largely disappointed by Tuesday’s publication of London’s position paper on the future of the customs and trading relationships between the UK and EU.
The UK will on Wednesday morning set out its position on how to deal with the Irish Border. It is one of the three key priority strand-one negotiating topics on which “substantial progress” needs to be made if talks on the trade issue are to open in October.
The customs paper from the UK’s Department for Exiting the European Union (DExEU) is one of 12 detailing the UK’s negotiating positions expected ahead of October.
It makes clear that the UK will leave both the EU single market and customs union, but suggests two possible forms of tailor-made customs relationships to replace them.
The paper’s case for a transition period to allow both the EU and the UK to avoid a Brexit cliff-face in 2019 has been welcomed by business interests.
Under the proposals, Britain would leave the existing EU customs union, but would maintain a “close association” for a limited period in order to give both sides time to put in place new border checks and infrastructure.
But such a close association would only be possible, EU officials say, if the UK did not seek during that period to forge bilateral trade relationships with others.
Long-term options
The UK paper proposes two long-term options to replace the customs union: “The Highly Streamlined Customs Arrangement” and the “New Customs Partnership with the EU.”
The “streamlined” model would see the UK manage a new customs border with the EU, unilaterally simplifying requirements on EU goods entering the country as much as possible and providing border “facilitations” to reduce and remove trade barriers.
“The UK would put in place new negotiated and potentially unilateral facilitations to reduce and remove barriers to trade; and implement technology-based solutions to make it easier to comply with customs procedures,” the paper says.
Such technology-based solutions – ranging from expansion of “trusted trader” schemes to number-plate recognition cameras – have been floated as means of creating a frictionless border in Ireland, although Minister for Foreign Affairs Simon Coveney recently warned they should not be seen as a solution.
The UK position paper admits the streamlined option would entail “an increase in administration”. It may also require firms to do self-assessments of their own customs duties.
The “partnership” approach would mean preserving an internal border-free EU and UK with the latter imposing at the old external border the EU’s tariffs, standards and rules on goods imported to trade within the broader EU.
Meanwhile, it would impose its own regime on goods imported solely for the purposes of trading within the UK. That would allow the UK to begin to forge new bilateral trade relationships with third countries, the ostensible purpose of Brexit.
Degree of trust
This complicated double import policing system would require considerable bureaucracy, customs mechanisms never used before, and a degree of trust by member states that may be difficult to achieve – as the paper puts it, “an innovative and untested approach”.
Were it deemed feasible, the partnership approach would be the closest approximation to what has been called a “soft” Brexit and might have an appeal to Ireland in not requiring any customs checks on the Border.
But the paper has not gone down well. In Brussels, officials have promised to study the proposals while the opposition at Westminster dismissed them.
“These are incoherent and inadequate proposals designed to gloss over deep and continuing divisions within the cabinet,” Labour’s shadow secretary of state for exiting the European Union, Keir Starmer, said in a statement.
