(Bloomberg) -- Extending the U.K.’s transitional customs arrangements with the European Union could be a way to resolve the thorniest question facing the Brexit negotiations -- what to do about the Irish border, according to people familiar with the British position.
The idea is one of many options in the mix as the U.K. considers how it can square the circle of leaving the EU to strike free trade deals around the world, and avoid border checkpoints at the frontier with the Republic of Ireland, three people said.
Brexit negotiations are currently stuck on the question of the Irish border. If it can’t be resolved, the talks will be at risk of collapse, sending the U.K. crashing out of the EU without a deal.
Both sides agree that Brexit mustn’t create a hard border on the island of Ireland. To guarantee that, the EU is demanding a so-called backstop in the withdrawal agreement, an insurance policy that will make sure that whatever the future relationship between the U.K. and EU, no hard border appears in Ireland.
The EU’s current proposal for the backstop would essentially keep Northern Ireland in its customs bloc after Brexit, severing it from the rest of the U.K. Prime Minister Theresa May says no British premier could accept that and negotiators are working on alternatives.
Under the new, early-stage proposal for a backstop, which hasn’t been agreed internally, the U.K. would remain aligned with the EU’s customs arrangements beyond the current cut-off date for the transitional period of Dec. 31, 2020, the people said.
All the individuals involved asked not to be named commenting on a confidential idea that’s been discussed but not formally proposed at any level yet. Some expressed skepticism that it could be made to work.
EU officials have already expressed concern about the prospect of the backstop being used as a backdoor route for the whole U.K. to remain inside the EU’s institutions. EU officials have said the backstop should be specific to Northern Ireland.
But May can’t accept any proposals that would cut Northern Ireland off from the rest of the U.K.
Politically, she also can’t be seen to accept anything that would constitute a “customs union” as senior Brexit campaigners in her own Conservative Party have warned that this would be a betrayal of the 2016 U.K. referendum vote.
May has insisted repeatedly that the U.K. will be leaving the EU’s customs union, under which member countries pool their commercial policies, agree a common tariff with outside nations, and can’t strike trade deals on their own.
A spokesman for May was asked Monday whether membership of the customs union could be extended. He told reporters: "The implementation period, both ourselves and the European Union are clear, ends in December 2020. There are no plans for an extension to that."
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