Theresa May Considers Plan to Extend Brexit Transition Period

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U.K. Prime Minister Theresa May is weighing up a plan to stay tied to European Union rules for longer in a radical move designed to break the deadlock in Brexit talks, according to people familiar with the matter.

May is considering an EU proposal to extend the transition period that is already due to keep the U.K. bound to EU rules for 21 months after exit day. She signaled her willingness to give ground during talks with fellow EU leaders at a summit in Brussels on Wednesday, one of the people said. European Parliament President Antonio Tajani confirmed the issue was discussed between the 28 leaders.

The move, which would effectively prolong the terms of Britain’s EU membership, could potentially break the impasse. But it would come at a high political price in London.

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Euroskeptics in May’s Conservative Party are likely to accuse her of delaying Brexit, and will balk at the prospect of Britain continuing to pay about 10 billion euros a year into the EU’s budget. Any deal agreed in Brussels needs to win approval in Parliament, where May doesn’t have a majority and faces opposition on all sides.

The prime minister and her team are willing to consider it as a way to overcome the biggest obstacle to a deal -- the Irish border -- according to people familiar with the matter. Talks are stalled on the question of how to avoid a policed frontier between Northern Ireland and the Republic of Ireland, without erecting new barriers between Northern Ireland and the rest of the U.K.

At a summit in Brussels, EU leaders focused on sending positive messages that a Brexit deal is within reach, even if progress is slow. Chief EU negotiator Michel Barnier said "much more time" was needed, and that he would continue working "calmly and patiently."

Theresa May Considers Plan to Extend Brexit Transition Period

Political Price

One of the people familiar with the discussions said May’s Tory party would find it difficult to be fighting the next general election -- due in 2022 -- while the country is still inside the single market and customs union.

The idea was discussed on Tuesday during a meeting of May’s cabinet in London. One of the people said the International Trade Secretary Liam Fox was the most vocal in his openness to the idea of extending the transition. His voice is important as he is a veteran Brexiteer. Other ministers spoke about the issue during the discussion but were more cautious, the person said.

The EU hopes an extended transition will be enough to help May accept its plan for the Irish border, an official said. The plan is known as the backstop because it’s an insurance clause to make sure that no matter what future trading arrangement the two sides decide on, no new border will emerge on the island of Ireland. The EU side is still insisting that the exit treaty include its proposed backstop, which May has said is unacceptable because it could potentially put Northern Ireland in a different customs regime to Britain.

Negotiators will try to find a form of words to say that as long as the transition is extended long enough for the U.K. and EU to agree a free trade deal, the backstop will never be used.

But the devil is in the detail. There’s no guarantee the trade deal could be finalized in three years and the EU would expect the U.K. to sign up to some kind of customs union. The terms of that, including whether the U.K. would have an independent trade policy, could only be agreed on after the U.K. has left.

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