Brexit Bites, 6 July 2018

Jul 05, 2018

At a summit of EU leaders at the end of last week, there was little report of progress on finding a solution to avoid a hard border on the island of Ireland.  Media reports this week suggest that the UK is planning to release proposals for a third customs option with the EU. In the next in our series of Back to Brexit Basics, we look at some elements of the free trade agreement recently agreed between the EU and Canada.

No-deal Brexit?

Little progress has been reported on finding a solution to the Irish border following last week’s two-day European Council summit in Brussels.  And emerging reports from the meeting are that it would be wise for governments and businesses to plan for the worst.

President of the European Council, Donald Tusk made the following remarks after the summit: “On Brexit. The EU27 has taken note of what has been achieved so far. However, there is a great deal of work ahead, and the most difficult tasks are still unresolved. If we want to reach a deal in October we need quick progress. This is the last call to lay the cards on the table.”

The customs conundrum

There are various reports suggesting that the UK has drawn up proposals for another possible model for a customs arrangement with the EU after Brexit.  Some reports say that the new plan would allow the UK freedom to set its own tariffs on goods imported into the UK and technology would be used to establish the final destination of goods so that the correct tariffs could be applied.  No further details have been released but it’s understood that the plan will be debated by the UK cabinet today.

A customs partnership option and a maximum facilitation option are already on the table.  The customs partnership model, reportedly favoured by the Prime Minister, would see the UK collect customs duties on behalf of the EU.   The maximum facilitation or “max fac” option seeks to use technology to keep the EU borders as frictionless as possible.  The EU has concerns about both options and would like to see concrete details on how a hard border can be avoided on the island of Ireland.

Discussions also took place in May on keeping the UK tied to the EU customs rules beyond the transitional date of 31 December 2020 and would mean that the whole of the UK would be aligned with EU rules.  This idea is an extension of the EU’s proposal of the backstop which would keep Northern Ireland aligned with the EU’s customs union and Single Market.  However, the UK proposal was criticised by the EU.

Read all of our Brexit updates and Back to Brexit Basics on the dedicated Brexit section of our website.