Brexit Bites, 11 June 2018

Jun 11, 2018

Last week, the UK released a technical note outlining its vision for a temporary customs arrangement to avoid the return of a hard border on the island of Ireland and the EU is sceptical of it. In the next in our series of Back to Brexit Basics, we look at customs borders that currently exist between the EU and non-EU countries and what can be learned in terms of Brexit.

A new customs plan?

The issue of avoiding a hard border on the island of Ireland has been a major sticking point in the Brexit negotiations so far.  Last Thursday, in a bid to advance matters before the EU Summit at the end of the month, the UK government released its proposals for a “backstop” plan on customs arrangements which it believes can be put in place if no other solution is found to the border issue in the talks between the EU and UK.

This backstop arrangement is something that the EU and Ireland have been insisting on for several months.  While the EU’s version of the backstop keeps Northern Ireland out of the EU Custom Union, the UK’s version released, would keep the whole of the UK inside the customs union until a more permanent solution can be put in place that avoids border checks between Northern Ireland and the Republic of Ireland.

The technical note puts forward some proposals for temporary customs arrangements in order to effect the backstop and states that permanent customs arrangements should be in place "by the end of December 2021 at the latest".  This is one year after the end of the suggested transition period which ceases on 31 December 2020.

The temporary customs arrangements would mean that tariffs, quotas, rules of origin and customs processes including declarations on all UK-EU trade would be eliminated and that procedures for VAT and excise would continue as normal.  Other elements of the plan would see the UK continuing to apply the EU’s common external tariff at the UK’s external border and the UK would have the right to negotiate and sign new free trade deals with other countries.  The note also said that the UK should be able to continue to participate in any new EU trade deals that come into force during this temporary customs arrangement.

The UK would also like to continue to operate the Common Transit Convention which could mean that goods can transit for example from Ireland through the UK and into the EU with only one set of customs checks.  The technical note also requests that the UK and EU apply a waiver from “safety and security entry and exit declarations on UK-EU trade”.

EU Chief negotiator Michel Barnier said that he welcomed the publication of the proposals but did have some concerns that it was not feasible to extend the backstop arrangement to the entire UK as the four freedoms of the Single Market cannot be divided.  "Backstop means backstop," Mr Barnier said. "The temporary backstop is not in line with what we want or what Ireland and Northern Ireland want and need." He did clarify that the EU will examine the customs paper and “discussions continue”. 

Taoiseach Leo Vardakar said that the backstop agreement cannot be time limited by a date. He said that the backstop should apply until there is an alternative in place to avoid a hard border.

It is looking unlikely that a solution to the border problem will be found at the June summit and may very well be pushed back to the EU Summit in October.