U.K.’s No-Deal Plan for Ireland Looks a Bit Like the Backstop

(Bloomberg) -- The U.K. government has come up with a plan to keep the Irish border open in a no-deal Brexit, and it bears at least some of the hallmarks of the much-loathed backstop that lawmakers have vowed they can’t accept.

The plan fragments the U.K.’s internal market by applying different tariffs and limited checks between Northern Ireland and Great Britain.

The risk of falling into the European Union’s backstop plan, and seeing different parts of the U.K. treated differently, is one of the main reasons Theresa May’s Brexit deal has failed. But May said on Tuesday that leaving without a deal would also risk “potential damage” to the union of the U.K. Lawmakers vote on Wednesday on the no-deal option.

Under the plan, goods will still flow seamlessly and tariff-free from Ireland to Northern Ireland without checks or duties applied. The same goods will be subject to a temporary tariffs schedule when sold in Great Britain, effectively distorting the U.K. market.

The British government also acknowledged that a limited number of checks via designated points will be needed for animal products and phytosanitary protection reasons for goods crossing Northern Ireland and Great Britain. That was in the backstop too.

The U.K’s proposed plan for the Irish border under a no-deal scenario only applies for goods from the Republic of Ireland crossing to Northern Ireland, not the rest of the EU. But it’s unclear how the origin of each good will be checked, since they will be flowing without controls through the two jurisdictions in the island.

The move could also run afoul of the World Trade Organization’s most-favored nation principle if it gives preferential trade terms to Ireland than the U.K.’s other trade partners.

“We will carefully analyze the compliance of the U.K. plan with WTO law and the EU’s rights thereunder,” European Commission spokesman Margaritis Schinas told reporters in Brussels. “The differential treatment of trade on the island of Ireland and other trade between the EU and the U.K. raises concerns.”

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