Thursday

17th Jan 2019

EU draws red line on UK customs deal

Britain cannot keep its EU trade perks if it quits the customs union, the European Commission has warned as Brexit talks resume.

"Without a customs union and outside the single market, barriers to trade in goods and services are unavoidable," the EU's chief negotiator, Michel Barnier, said in London on Monday (5 January).

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

"Time has come [for the UK] to make a choice," he said.

Barnier spoke after a brief meeting with British prime minister Theresa May and her Brexit negotiator, David Davis, ahead of the first round of talks this year.

The French politician added that Britain would have to abide by all EU laws during a transition period after it left the European Union in March next year.

"Everyone has to play by the same rules during this transition," he said.

Davis told British TV afterward that the UK would definitely quit the EU customs bloc. "It's perfectly clear what we want to do and there's no doubt about it … we're leaving the customs union, but we're aiming for a good future for Britain," he said.

May's spokesman had also said before the Barnier meeting that "it is not government policy to be members of 'the' customs union or 'a' customs union".

The spokesman said the UK wanted a "customs partnership" or a "highly streamlined customs arrangement" instead.

The "partnership" would give the UK a unique right to negotiate free-trade deals with other countries, such as the US, but would see it mirror EU requirements for imports at British borders.

The "streamlined arrangement" would see it quit the customs union, while using high-tech gadgets to speed up the resulting new customs formalities.

The Brexit talks will take place in Brussels for the rest of the week.

Barnier said he expected May to put forward a detailed document on her customs plan "in the next few weeks" ahead of an EU summit dealing with Brexit in March.

Any customs deal will have to honour the UK's existing pledge not to introduce security checks on its land border with Northern Ireland.

"If the UK wants to put up barriers to trade that is their choice … our priority will be to ensure there is no border put up again on the island of Ireland," Guy Verhofstadt, the European Parliament's Brexit negotiator said on Monday.

Squeeze on May

May's room for manoeuvre is also being tightened by Conservative Party politics.

Hardline eurosceptics, such as Tory MP Jacob Rees Mogg and foreign minister Boris Johnson, are threatening to oust her from office if she gives in to EU demands.

Asked by UK press on Monday if he was interested in her job, Rees Mogg said: "I'm very happy as a backbencher and what I do want is Mrs May to stay prime minister".

But he added: "If you look at Mrs May, it seems to be quite clear she does it because it's her duty to do it. I don't get the impression that it's a lot of fun for her. It's hard work".

He also criticised her "gloomy" election campaign, in which the party lost its parliamentary majority, last year.

A UK leadership contest would slow EU talks as the clock ticks to Brexit, increasing the risk of the UK leaving without any deal in place.

Banking cliff

Andrew Bailey, the head of the British banking regulator, the Financial Conduct Authority, said that would do untold damage on both sides of the English Channel.

"There's a range of operational issues arising from Brexit which, if not tackled, will create financial stability risks and issues for both the UK and the European Union," he told press in London on Monday.

He said there were €13.6 trillion worth of financial derivatives contracts that extended beyond March 2019 and 36 million EU and UK insurance policies whose validity could be put in doubt.

Bailey said British banking authorities ought to sign bilateral "memorandums" with those in other EU financial centres, such as Berlin, Frankfurt, and Paris, to work together no matter what happens in the Brexit process.

"I think this point is increasingly understood on both sides. It's not a matter of scaremongering to get negotiating advantage," he said.

Analysis

The next hurdles in Brexit talks

As EU-27 came up with its positions for the transition period, and there are plenty of political landmines left for the talks. Here is a look at what could upset the Brexit negotiations.

Barnier warns UK Brexit transition period 'not a given'

After one of the tensest week so far in Brexit talks, 'substantial' disagreements remain between the UK and the EU over transition, with Michel Barnier insisting London needs to decide on the future relationship and Ireland for Brexit to happen.

News in Brief

  1. British PM scrapes through no confidence vote
  2. Spanish PM calls for EU gender equality strategy
  3. Farage says bigger Brexit majority if second referendum
  4. Macron starts 'grand debate' tour after yellow vests protests
  5. Barnier: up to London to take Brexit forward
  6. Stimulus still needed, ECB's Draghi says in final report
  7. May's Brexit deal defeated by 230 votes
  8. German economy hit by global economic turbulence

Opinion

Lost in Brexit chaos - abortion rights in Northern Ireland

Labour MP Diana Johnson has brought a private members bill to Westminster that proposes to decriminalise abortion in the whole of the UK, which means that, if successfully passed, current provisions for Northern Ireland will also be repealed.

May on whistle-stop EU tour to seek new backstop pledges

The British prime minister dramatically delayed a parliamentary vote on the Brexit deal at the last minute, as she faced defeat. Theresa May will now speed-tour EU capitals to try to secure further political guarantees.

Stakeholders' Highlights

  1. International Partnership For Human RightsKyrgyz authorities have to immediately release human rights defender Azimjon Askarov
  2. Nordic Council of MinistersSeminar on disability and user involvement
  3. Nordic Council of MinistersInternational appetite for Nordic food policies
  4. Nordic Council of MinistersNew Nordic Innovation House in Hong Kong
  5. Nordic Council of MinistersNordic Region has chance to become world leader when it comes to start-ups
  6. Nordic Council of MinistersTheresa May: “We will not be turning our backs on the Nordic region”
  7. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  8. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  9. Nordic Council of MinistersState of the Nordic Region presented in Brussels
  10. Nordic Council of MinistersThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  11. Nordic Council of MinistersThe Nordic gender effect goes international
  12. Nordic Council of MinistersPaula Lehtomaki from Finland elected as the Council's first female Secretary General

Latest News

  1. MEPs allow Draghi's membership of secretive bank group
  2. EU parliament backs Morocco deal despite row
  3. Barnier open to 'future relations' talks if UK red lines shift
  4. German spies to monitor far-right AfD party
  5. On Morocco, will the EU ignore its own court?
  6. UK parliament rejects May's Brexit deal in historic defeat
  7. EU suggests majority vote on digital tax by 2025
  8. MEPs redouble appeal on sexual harassment

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic design sets the stage at COP24, running a competition for sustainable chairs
  2. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  3. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  4. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  5. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  6. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  7. International Partnership for Human RightsCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  8. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  9. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  10. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  11. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  12. Mission of China to the EUChina: Work Together for a Better Globalisation

Join EUobserver

Support quality EU news

Join us