The Brexit Irish Border Backstop Just Got Even More Complicated

(Bloomberg) -- How to avoid a hard border between the Republic of Ireland and Northern Ireland has long been the sticking point in Brexit talks.

But as negotiations reach the endgame, it’s become a high-stakes fight that could shape the whole U.K.’s relationship with the European Union -- and even leave Britain shackled to the bloc’s rules indefinitely.

1. Where Do Negotiations Stand?

The border problem arises in the first place because the U.K. wants to leave the EU’s single market and customs union -- two frameworks that allow the current frontier between Northern Ireland and the Irish Republic to be all but invisible. Both sides committed to avoiding a hard border after Brexit, and there can be no divorce deal unless that’s upheld.

To that effect, the U.K. and EU agreed to include a guarantee clause -- known as a backstop -- in the divorce agreement. But the EU’s proposal for how the backstop would work essentially means a border between Northern Ireland and mainland Britain. That was unacceptable to the U.K.

So London made its own proposal to keep the whole U.K. in a customs union as a temporary measure. The EU is willing to accept this -- with conditions.

2. What’s the New Fight About?

Pro-Brexit members of Cabinet don’t want the Irish backstop to trap the U.K. in a customs union forever. So they’re demanding some kind of exit or review clause that would allow the U.K. to get out when it wants to.

The EU -- and Ireland -- don’t oppose a review clause in principle, but say it can’t be the U.K.’s decision alone to leave the backstop. And they say it has to be open-ended to have any meaning. It can’t include an end-date or any unilateral exit mechanism.

So if the U.K. insists on a unilateral eject clause, then the EU will probably insist that its original backstop -- the one that carves out Northern Ireland and that Prime Minister Theresa May calls unacceptable -- goes into the divorce agreement as an ultimate guarantee.

3. So What Are the U.K.’s Choices?

It could commit to staying in a customs union, which it could only leave by mutual agreement. This would be seen as a betrayal by Brexiters in May’s party who consider the U.K. being bound to EU rules indefinitely as too great a risk. (They want to leave the bloc’s customs regime so they can strike their own trade deals -- they consider that a major prize of Brexit.)

But to further complicate matters, this plan could enrage the Northern Irish Democratic Unionist Party, which prop up May’s government, because it would still involve additional checks on goods moving between mainland Britain and Northern Ireland.

Or, the U.K. could join a temporary customs union, but retain the ability to exit unilaterally. This would deliver what Brexit purists want, though it would come at the cost of allowing the EU to keep Northern Ireland inside the bloc’s customs territory even as mainland Britain goes a separate way. Again, this would enrage May’s Northern Irish political backers.

But there could still be a third way being worked out. Attorney General Geoffrey Cox, who spoke on the backstop in Cabinet Tuesday, and Brexit Secretary Dominic Raab will work on further details of the U.K.’s proposal before it is presented to ministers, a person familiar with the matter said.

©2018 Bloomberg L.P.