Brexit: Desperate attempts to reach customs union compromise

London

THE European Union (EU) will have to agree on a customs union compromise to prevent the UK crashing out of the union without a Brexit deal.

Both the UK and EU desperately want a deal to avoid border friction and chaos, a potential equity slide and ultimate recession. A no deal Brexit also implies that the EU would not receive most of an agreed financial settlement of £39 billion (S$71 billion) if there is no deal.

EU leaders are expected to discuss a text of agreement proposals in meetings that will take place between this Wednesday and Friday. Hopefully a preliminary accord would then be forged in November ahead of a UK parliamentary vote and confirmation.

So far, the process remains a mess, 16 months since initial negotiations began. Several UK cabinet ministers, Conservative MPS and Northern Ireland's Democratic Unionist Party (DUP) have rejected leaked proposals that Britain remain in the EU customs union after Brexit.

The key concern of mostly Conservative MPs is that Premier Theresa May will agree that the UK remains a member of the EU's customs union for an indefinite period. Under those terms the UK would not be able to negotiate free trade deals with the US, Canada, China, Australia, Singapore and other nations until the EU gives it permission to do so.

Britain would also be subject to changes in EU tariffs and regulations for both goods and services without any vote after Brexit.

Several cabinet ministers are threatening to resign if this leaked potential concession by Olly Robbins, Mrs May's chief negotiator, is agreed with the EU. The cabinet meets on Tuesday.

In fraught circumstances Mrs May's negotiating team is desperately trying to reword a fudged withdrawal accord to fix the discontent in the cabinet and Tory party.

Some observers expect an extention of the deadline date of the so called two-year Brexit implementation period after March 2019. In that period the UK is still part of the EU customs union and economic and political body, but without a vote. That part of the accord was agreed last December.

In an article in the Sunday Times, David Davis, former Brexit secretary, accused the premier of pressing ahead with a " flawed" plan. Mr Davis, who recently resigned in protest over Mrs May's negotiations, accused her team of "incipient panic".

"It is time for the Cabinet to exert their collective authority . . . our constitution is on the line," he wrote.

He warned that failure to get agreement on a final trade deal would leave Britain paying £39 billion to Brussels for a "pig in the poke".

Anne-Marie Trevelyan, a pro-Leave MP who is parliamentary private secretary at the Department for Education, said remaining in a "temporary customs arrangement" after the end of the transition period in December 2020 "means simply delaying Brexit".

In an article in the Sunday Telegraph, she added that such an accord would "cause 17.4 million people who voted for it to lose faith in our democracy, and in our democratic and legal institutions".

Mrs May has pursued her customs concession as the EU has stated that Northern Ireland should remain in the EU customs union to keep its border with Ireland open. Such a policy would effectively break up the United Kingdom.

Mrs May is highly dependent on Northern Ireland's 10 Democratic Unionist Party (DUP) MPs in Parliament to prop up her minority government.

In a leaked email to The Observer newspaper, DUP leader Arlene Foster has threatened to withdraw support. She complained that she had an explosive exchange with Michel Barnier, the EU's chief negotiator, and threatened to trigger a no deal Brexit.

Eurosceptics, including Boris Johnson and Mr Davis, want Mrs May to strike a free trade deal based on the agreement between the EU and Canada, using technology to help solve the problem of the Northern Ireland and Irish border.

Mrs May's other problem is that Conservative, Labour and Scottish Nationalist MPs who want to remain in the EU and possibly hold another referendum, also have to be placated.

Senior ministers have disclosed that they could support a compromise that allowed the UK to withdraw from the customs union, without depending on Brussels' permission.

"Based on conversations this weekend there appears to be a glimmer of hope," said a hopeful MP.

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