Davis Warns Irish Border Measures May Take Years: Brexit Update

(Bloomberg) -- Brexit Secretary David Davis took questions in the House of Lords, telling lawmakers that practical measures to resolve the Irish border question could take “years,” but that he wants a “very substantive” agreement on future relations with the European Union in place by October.

Davis was speaking a day before ministers are due to discuss how they see the U.K.’s trading relationship with the bloc after Brexit. Negotiators are also due to resume talks on Wednesday in Brussels, with the issue of the Irish border still the biggest risk to a deal. The U.K. has drafted a new proposal that it hopes will help break the deadlock.

Coveney Says Next Move Britain’s on Border Issue (6:42 p.m.)

“We don’t want any border down the Irish sea, just like we don’t want any border on the island of Ireland,” Coveney says. “It’s not in Ireland’s interest if that happens but the current negotiating position of the British government makes a lot of these things a lot more difficult than they need to be.”

“I think there is an acceptance now that the next move on these negotiations on the Irish border issue is a move that Britain needs to make in terms of the negotiation as they progress towards the assessment of progress towards the end of June,” he says. “I am optimistic and confident that we can find a way forward.”

Coveney: Ireland Needs Substantial Progress by June (6:15 p.m.)

In Dublin, Irish Deputy Prime Minister Simon Coveney says in the senate the government wants “substantial progress” on Irish issues before June’s European Council meeting. Ireland “wants something much closer” than a free trade agreement between the EU and the U.K. if possible, he says, and he’s “hopeful” the U.K. may revisit its red lines on future relations with the bloc.

Davis Wants ‘Substantive’ Future Ties Deal by Oct. (5:58 p.m.)

Davis was asked how much detail will be available by the time Parliament votes on the Brexit deal. Davis said the withdrawal will be a full legal text -- “that will be the intention” -- and the future relationship agreement will be “very substantive.”

Davis: U.K. Wants Liberal Deal on Services (5:52 p.m.)

Davis says the U.K. wants to get “the most liberal arrangement on services we can” with the EU. “Services are a very large component of our exports, so clearly we want to maintain the most open access to services as possible,” he says.

Davis: Irish Border Measures May Take ‘Years’ (5:49 p.m.)

It could take “years” to get the practical measures in place to resolve the Irish border question, Davis says, but negotiators don’t have that long.

“The main issue here is time,” he says. “I don’t think it’s ten years, but we are only talking about a few years so we have got a race on our hands.”

His comments echo a suggestion from Theresa May in March, which led to speculation that transitional arrangements for the U.K. membership of the EU customs union might need to be extended to allow for any new system to be prepared.

Davis: EU Pushed Back on U.K.’s Border Proposals (5:28 p.m.)

Davis confirms that the EU has turned down Britain’s two key plans for a new customs arrangement with the bloc. He says EU negotiators didn’t understand how the U.K.’s idea for a new close partnership would work. Under this proposal, the U.K. would collect the EU’s tariffs and then refund businesses that should be exempt later.

He also says that “in the context of Northern Ireland,” the EU didn’t like Britain’s other main customs option -- for using technology and “trusted trader” schemes to minimize the need for goods checks at the frontier.

“I don’t put responsibility on either side, it’s better to treat it as a joint problem,” he says of the Irish border. “I can’t imagine the circumstances where an Irish government would put up a hard border. It’s part of our task to make this work without that.”

Talks on the the Irish border are due to resume in Brussels after negotiations restart on Wednesday.

Davis Wants to Keep Customs Costs as Low as Possible (5:19 p.m.)

Davis says the aim is to keep the costs to business of any future customs arrangements as low as possible, including by having no tariffs, and electronic pre-notification. “What we are seeking to do is minimize those costs for all businesses -- small, medium and large,” he says.

Davis: U.K. to Leave Customs Union, Single Market (5:13 p.m.)

Davis acknowledges that the government will have to address the issue of a customs union with the EU in both the House of Commons and House of Lords, but is firm on the administration’s intentions. “We view leaving the EU as meaning the single market and leaving the customs union,” he says. “That’s what the British people were told in the referendum.”

Davis Explains Concession on Transition Length (5:11 p.m.)

Davis explains why Britain didn’t insist on a transition period lasting a full two years. “If we had tried to go beyond December 2020, knowing our negotiating partners the bill for that last three months might have been quite big.”

Davis Hints at Linking Brexit Payments to Trade Deal (5:08 p.m.)

Davis develops his threat to withhold the Brexit bill payments of up to 39 billion pounds if the EU doesn’t give Britain a good trade deal. He says people need to read the legal text of the contract that comes out of the negotiations, hinting that he could try to insert a clause making payments conditional on trade terms. If this really is Davis’s aim, it’s hard to see the EU signing up.

Davis Expects ‘Tussle’ on Financial Services (5:01 p.m.)

Davis said there would be a “tussle” over the status of financial services after Brexit, but said that the remaining EU members aren’t united over what kind of access that U.K. banks should have to the bloc.

Davis: Trade Deal Can Be Finalized Before Brexit (4:58 p.m.)

Davis still thinks the agreement on future trade can be largely finalized by Britain’s scheduled departure next March, when a 21-month implementation period begins.

“If you have an implementation period for businesses, they need to know at the beginning of the implementation period what it is they’re going to implement,” he tells peers. “In order to have it all done, we really have to be very, very substantively there in October in joint report-type terms, and there in legal terms pretty much by the time we leave.”

Davis: Transition Period Not for ‘Extra’ Talks (4:48 p.m.)

Davis says the transition period is not about extending negotiations, and he wants a detailed agreement on the U.K.’s future relationship with the bloc in place before it leaves.

On the Irish border, he said he couldn’t guarantee a deal would be done by June -- as Ireland wants -- but he’s aiming for October.

Davis: U.K. Still Working on EU Border Proposal (4:44 p.m.)

“Northern Ireland clearly is highly controversial,” Davis says. “We stand by the words used in the joint report in December, but we don’t agree with the commission’s interpretation of that.”

Davis also says a detailed deal on the future is needed before Parliament votes on it.

Coming Up:

  • Negotiations in Brussels are scheduled for Wednesday through Friday
  • Prime Minister Theresa May’s inner Brexit Cabinet meets on Wednesday
  • Local elections are on Thursday: the Conservatives are braced for a weak result

Earlier:

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