This week has seen great progress. 70% of the UK/EU ‘divorce bill’ has been agreed. Citizens rights have been clarified and Britain’s exit liabilities confirmed. However, the issue of the Irish border remains.
The draft transition agreement contains a ‘backstop’ clause that will keep Northern Ireland under the legal oversight of the EU in the event of no deal scenario.
Under these circumstances, if the UK were to attempt to exit the EU without a customs arrangement, this would create a hard border between Northern Ireland and the rest of the United Kingdom. It is widely believed that this scenario could cause the DUP to withdraw their support for Theresa May’s government.
Without a customs union, a hard border would spring up between Northern Ireland and the ROI, compromising the Good Friday agreement and threatening peace. However, the UK remaining within the current EU customs union would prevent new trade deals being struck with the rest of the world.
The ‘transition period’ has also been agreed to. But, this agreement stipulates that the UK cannot sign trade deals with nations outside the EU during this time, unless the deal signed is agreed to by the EU27.
These issues frustrate the process of agreeing new FTAs, with both challenges hinging on solving the Irish border conundrum.
Furthermore, things are beginning to change within parliament. A growing group of MPs are advocating membership of the EEA/EFTA as a pillar of the new UK/EU relationship. This would involve the agreement of a new UK/EU customs union, but would reduce the impact on Britain’s service-based economy.
EEA/EFTA membership is an attractive option, as it allows single market access at low cost, without the constraints of the Common Agricultural Policy, Common Fisheries Policy, EU customs union or ECJ. EFTA prioritises free trade above political union, acting as the body that facilitates the economic agreement between Lichtenstein, Iceland, Switzerland, Norway and the EU.
The primary issue with EEA/EFTA, is that it requires freedom of movement.
There is growing support within parliament for a softer Brexit, with many MPs diverging from the party line and voting in what they see as the best interests of their constituents. A vote on the customs union is expected to take place in October.
Some MPs believe the government could lose this vote. If the government loses, it is believed that the Irish border issue has the potential to trigger a constitutional crisis, leading to a subsequent vote of no-confidence.
While the achievements of this week are notable, it must be stressed that Brexit’s greatest challenges remain unsolved.