Yesterday evening the Telegraph reported that the UK government is set to stay in the customs union. Then this morning a source reported that PM May's office dismissed Telegraph reports of remaining in the customs union beyond 2021. Is it the UK press trying to gain some plaudits or the UK government losing the plot, both are equally possible.
To be sure things in the never-ending Brexit drama remain extremely fluid and confusing: the transition agreement is due to end in December 2020 and in theory it would be possible to extend it, although that would have to be agreed by the EU as part of the withdrawal agreement, which has to be finalized by this autumn.
Prime Minister May, who today is at the EU western Balkans summit in Sofia with the German chancellor, Angela Merkel, and the French president, Emmanuel Macron, commented “No, we are not [climbing down]. The United Kingdom will be leaving the customs union, we are leaving the European Union. Of course we will be negotiating future customs arrangements with the European Union and I have set three objectives; the government has three objectives in those."
"We need to be able to have our own independent trade policy, we want as frictionless a border between the UK and the EU so that trade can continue and we want to ensure there is no hard border between Northern Ireland and Ireland" she added.
The story was reported after peers finally gave the EU withdrawal bill a third reading, but not before inflicting a 15th defeat on the government.
The future of the bill is now uncertain as the government tries to estimate the risk of irreversible defeats in the Commons. Cabinet sources also stated “There was no proposal discussed or agreed that would see us staying in the customs union beyond the implementation period.”
There is still another massive issue that needs to be resolved and that is the Irish border, with Northern Ireland and the Republic both not wanting a Mexico style wall, the fairy tale of a facial recognition solution are looking bleak. If the UK were to stay inside the customs union for longer this problem would be void and a massive headache would disappear overnight while more discussions could take place. The EU have responded saying “We would cautiously welcome this as a first step but would have some questions,” one EU diplomat said. “If it’s only a play for time, that’s our concern. You can’t build a future relationship on soft assumptions.” The official then went on to say “The yardstick [for any new proposal] will be does it work for Ireland and does it work for the EU,” said and EU source, stressing that member states had not been presented with the details. “Whatever happens, it needs to deliver permanent certainty that there will be no hard border.”
In conclusion, the negotiations are proving to be problematic to say the least, so much so that most traders have stopped following the daily twist and turns altogether. Ireland is an issue that requires both the Republic and Northern Ireland officials to agree on a soft border with some restrictions. A soft Brexit with the UK staying in the customs union would clearly do the pro Brexit voters a disservice as the UK would still have to pay for access and any backlash would further discredit the prime minister.
In short: chaos.