How U.K.'s May Might Chart Course Through Brexit Minefield

(Bloomberg) -- As the hunt goes on for a solution to break the Brexit impasse, the answer might lie in how negotiators and their lawyers can make a vague political statement of intent look more like a watertight guarantee.

When the Brexit deal is done, there will be a divorce treaty, and alongside it a non-binding political declaration on what future trade ties between the European Union and U.K. should be. As Prime Minister Theresa May tries to find a way through the thorniest part of the divorce -- how to keep the Irish border open -- beefing up that political declaration might hold the answer, according to EU and U.K. officials.

How U.K.'s May Might Chart Course Through Brexit Minefield

The aim is to use the political declaration to make clear that the so-called Irish backstop -- the politically toxic clause in the treaty that risks carving Northern Ireland off from Britain -- will never be used. May needs to convince her own lawmakers of this, and crucially her allies in the Northern Irish Democratic Unionist Party that props up her government.

The focus now is on finding legally watertight language in the divorce treaty that cross references it to the political declaration, to show that the Irish backstop will never be used, EU diplomats say. And the political declaration should include a clear enough indication of where things will end up to reassure lawmakers, a U.K. official said.

While the political declaration on the future relationship won’t have legal status, it would be a public document, signed by leaders, making it hard to renege on, the U.K. official said. It cannot be legally binding, according to EU lawyers, but conclusions of European council meetings are rarely abandoned, the official said.

May offered a clue this week of how much she’s pinning on the declaration. In Parliament, she reassured the DUP that the future shape of the nation’s relationship with the EU will be clear when she agrees divorce terms. A very clear pledge by the EU on the future relationship -- centering around friction-free trade -- could reassure the DUP that the EU’s so-called backstop to avoid a hard border in Ireland may never be used.

“I have always said when we bring the withdrawal agreement back, there is a package,” May said. “It’s important members are able to look at the withdrawal agreement, but have sufficient detail on the future relationship in all its aspects.”

The DUP took note of May’s statement.

Under the plans being drawn up by negotiators, the U.K. would remain in a temporary U.K.-wide customs union until the two sides’ future relationship is ready. A full transition period that keeps the U.K. not only in the customs union but also the EU’s single market would last until the end of 2020 -- and, according to the latest proposal, it could be further extended.

EU officials signaled that they would only accept this plan if the U.K. agreed to stay in a customs union as part of its future relationship. That’s because the EU doesn’t want to change customs arrangements between the transition period and the temporary U.K.-wide customs setup, and then again to the future relationship. Part of the discussion will be about the scope of the U.K.’s customs ties to the EU and whether it would have an independent trade policy.

©2018 Bloomberg L.P.