U.K. Customs plan that would lead to hard Irish border, EU warns

Ireland coastal road

June 11, 2018 - The European Union stepped up its warning to the U.K. that its proposal to remain temporarily aligned to the bloc’s customs regime beyond 2020 won’t prevent the re-emergence of checks along the 310-mile Irish border.

In a presentation published on its website on Monday, the European Commission set out a series of concerns it has about the U.K.’s proposal, which Britain says should replace the EU’s plan that keeps only Northern Ireland in the European customs union and parts of the single market. An agreement on the Irish border must be reached if there’s going to be an overall Brexit deal before the U.K. leaves the bloc in March.

Both the U.K.’s and EU’s proposals are supposed to be temporary and to act as an insurance policy until the two sides strike a long-term trade deal that maintains an invisible border.

The U.K. version is a “complex and unprecedented arrangement for a short duration,” the Commission said in its presentation, shown to EU national diplomats on Friday. It “does not cover regulatory controls, leading to a hard border,” it concluded.

This shouldn’t come as a surprise to the U.K., which in last week’s paper said “an approach on regulatory standards” will “also need to be addressed.”

The Commission also complains that the U.K. plan:

  • Would lead to a “piecemeal application” of EU sales tax rules, which could lead to a “serious risks of fraud”
  • May need all of the EU’s existing global free-trade agreements to be renegotiated so that they cover the U.K. on a temporary basis
  • Is confusing on the scope of EU trade policy applicable to the U.K.
  • Throws up serious questions about the allocation of customs revenue, trade defense measures and rules of origin

 

Under the original schedule of the negotiations, the EU wanted the Irish border issue settled by the time of the EU summit at the end of June. Officials now acknowledge that with so many unanswered questions that looks impossible.

Source: Bloomberg