What is the Irish ‘backstop’?
The UK government is committed to avoiding a "hard" Border between Northern Ireland and the Republic, given that the current lack of border checks is seen as a big achievement of the Good Friday Agreement. UK Ministers believe that any trade agreement that it eventually signs with the EU will achieve that goal.
However, it may take years to conclude a trade pact with the EU and to find the technology that guarantees a frictionless Border. As a result, the EU has insisted that the UK agree to a “backstop” that guarantees that an invisible Border remains in place until the new trade arrangements are up and running.
What has Theresa May proposed?
Downing Street made clear last month that to maintain the backstop, the entire UK should remain tied to a customs union. The document published on Thursday provided more detail, saying the backstop - or “temporary customs arrangement” - would mean “the elimination of tariffs, quotas, rules of origin and customs processes including declarations on all UK-EU trade”.
Would the UK be able to strike trade deals with non-EU states?
Realistically, no. Under a temporary customs arrangement, the UK would be outside the scope of Europe’s Common Commercial Policy, but could not diverge from the tariffs applied by the EU, so the scope for new trade agreements would be minimal.
The document published on Thursday was correct in saying that the ability to sign deals was not zero, if countries want to agree pacts which have nothing to do with tariffs. It said: “The UK [WILL BE]able to negotiate, sign and ratify free trade agreements with rest of world partners and implement those elements that do not affect the functioning of the temporary customs arrangement.”
Why have David Davis and other Brexiters been wary of this proposal?
The UK's Brexit secretary has feared that the temporary customs arrangement would eventually become a permanent state of affairs, unless a firm end date is set. Mr Davis and fellow Brexiters worry that, without an end date, the UK and the EU would have no incentive to begin the hugely challenging task of signing a long-term trade deal.
Mr Davis has fought a battle with Mrs May on this. Has he won?
No. Number 10 fears that the EU would reject any inclusion of a firm end date, given how difficult it will be to create an invisible border under any long-term trade deal. The document published on Thursday said the UK “expects” the new arrangements to replace the backstop to be in place by the end of December 2021 but it did not make any concrete commitments.
The paper also referred to “a range of options for how a time limit could be delivered, which the UK will propose and discuss with the EU”, but gave no details or commitments.
Is that the only defeat for Brexiters?
No. The document said the backstop will be replaced by a permanent end state settlement “whose terms will need to be agreed by both parties”. The EU could therefore have a veto on when, and whether, the backstop is ended.
In a letter to Tory MPs this week, Mrs May said the EU would have no such veto, but there was no explanation of that point in the text.
The UK has also agreed to apply EU laws on value added tax on goods to the whole of the UK in a bid to remove the need for customs declarations at the borders. This would bind Britain closer to EU law than Norway or Switzerland and would require judicial oversight by the European Court of Justice - anathema to Brexiters.
Would the UK’s proposal guarantee an invisible border?
Not on its own. A critical phrase in Thursday’s document is the admission that “an approach on regulatory standards....will also need to be addressed”.
As a result, the UK conceded that the avoidance of a hard border requires not just a customs union, but close regulatory alignment, ranging from product standards to VAT. Brexiters fear that this would effectively keep the UK in the single market by the back door.
Will the EU accept this proposal?
Thursday's proposal will be a hard sell in Brussels and could bring Brexit talks to a crisis point. The EU has two principal concerns.
First, EU leaders see Northern Ireland as a unique issue because of the peace process. They do not believe the Article 50 treaty - in which the backstop would end up as a protocol - can be stretched to define lasting UK-EU trade arrangements.
Second, Brussels negotiators say a UK-wide backstop would allow London to carve up the single market to its advantage.
Mr Barnier believes avoiding Border checks requires a common regulatory space allowing the free movement of goods. If that were offered to the UK as whole, such trade terms would divide the "freedoms" of the single market, such as free movement of people.
–The Financial Times
