May Shifts Brexit Focus to Ireland, Leaving Cabinet War to Rage

(Bloomberg) -- Prime Minister Theresa May will focus her negotiating efforts on avoiding a hard border on the island of Ireland, and let the war in her Cabinet about post-Brexit trade rage on.

Discussions among senior ministers over how closely to mirror the European Union’s tariff and customs rules after Brexit will probably last for at least another two weeks, according to an official, speaking on condition of anonymity. With that in mind, the summit of EU leaders at the end of June is likely to focus on finding an insurance plan that would avoid a hard border, if no other arrangements are in place, the official said.

The Irish border issue remains the main obstacle to a Brexit divorce deal and if there’s no agreement by later this year, then the U.K. faces the prospect of crashing out of the bloc.

The EU and Ireland have been pushing the U.K. to settle the Irish border issue, but until now the U.K. has indicated there’s no rush. May’s team has been focused instead on getting her Cabinet to agree on the kind of future customs setup it wants after Brexit. The discussions have left her facing the open defiance of pro-Brexit ministers, and what was meant to be a private debate has turned into a very public battle between Cabinet colleagues.

The fight over the future relationship is a perilous one for May as both options being discussed -- one that would keep closer ties and another much looser setup -- have the potential to topple her. Two weeks ago she was outnumbered at a meeting of her inner cabinet and since then her team has continued to push back expectations of when a final decision might be made.

The Irish border issue is harder to postpone as a deal needs to be done before October, when both sides are aiming for an agreement. The EU and Ireland have said May’s team must engage seriously on the Irish issue as an urgent priority ahead of the June 28 summit of European leaders in Brussels.

Both sides agree that Brexit mustn’t create a hard border on the island of Ireland. The U.K. hopes that the future trade deal will be so effective that a hard border won’t be necessary.

The EU isn’t so sure that will be possible, and that’s why it’s insisting on a backstop provision so that if the trade deal isn’t good enough, there still won’t be a policed frontier that could threaten a 1998 peace deal.

The EU has proposed a backstop option that would keep Northern Ireland in the bloc’s customs territory after Brexit, when the rest of the U.K. leaves. May has already rejected this, saying it would be unacceptable to any British prime minister.

The ball is now in May’s court to come up with language that everyone can live with.

©2018 Bloomberg L.P.