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May Is Said to Mull Longer Transition to Break Brexit Deadlock

Theresa May Photographer: Jasper Juinen/Bloomberg
By Bloomberg
18 Oct 2018 0

U.K. Prime Minister Theresa May is weighing up a plan to stay tied to European Union rules for longer in a radical move designed to break the deadlock in Brexit talks, according to people familiar with the matter.

May is considering an EU proposal to extend the transition period that’s already due to keep the U.K. bound to the bloc’s rules for 21 months after exit day. She signaled her willingness to give ground during talks with fellow EU leaders at a summit in Brussels Wednesday, one of the people said. European Parliament President Antonio Tajani confirmed the issue was discussed between the 28 leaders.

The move, which would effectively prolong the terms of Britain’s EU membership, could potentially break the impasse. But it would come at a high political price in London.

At the meeting in Brussels, EU leaders decided that not enough progress has been made in negotiations to warrant calling a one-off summit in November for a divorce deal to be signed. Leaders, who made an effort to send positive messages on their way in, listened to May for about 15 minutes before having dinner without her. According to three government officials, at least some of them were left puzzled by her presentation.

Body Language

Tajani said May had offered nothing new, though he thought her “body language” was positive. The EU is now aiming for the December summit to get the deal done, according to one of the officials, though the idea of a November meeting hasn’t been ruled out. Chief EU negotiator Michel Barnier said “much more time” was needed, and that he would continue working “calmly and patiently.”

Talks are stalled on the question of how to avoid a policed frontier between Northern Ireland and the Republic of Ireland, without erecting new barriers between Northern Ireland and the rest of the U.K.

The prime minister and her team are willing to consider the longer transition as a way to overcome the the Irish border issue, according to people familiar with the matter. While it could help May sell a deal at home, it won’t remove the need to accept the most controversial part of the EU’s proposal — that in a last-resort situation, Northern Ireland could be split off from the rest of the U.K.

Euroskeptics in May’s Conservative Party are likely to accuse her of delaying Brexit, and will balk at the prospect of Britain continuing to pay about 10 billion euros a year into the EU’s budget. Any deal agreed in Brussels needs to win approval in Parliament, where May doesn’t have a majority and faces opposition on all sides.

One of the people familiar with the discussions said May’s Tory party would find it difficult to be fighting the next general election — due in 2022 — while the country is still inside the single market and customs union.

The idea was discussed on Tuesday during a meeting of May’s Cabinet in London. One of the people said the International Trade Secretary Liam Fox was the most vocal in his openness to the idea of extending the transition. His voice is important as he is a veteran Brexiteer. Other ministers spoke about the issue during the discussion but were more cautious, the person said.

Why Ireland’s Border Is Brexit’s Intractable Puzzle: QuickTake

The EU hopes an extended transition will be enough to help May accept its plan for the Irish border, an official said. The plan is known as the backstop because it’s an insurance clause to make sure that no matter what future trading arrangement the two sides decide on, no new border will emerge on the island of Ireland.

The EU side is still insisting that the exit treaty include its proposed backstop. May says this new would destroy the constitutional integrity of the U.K., by putting a customs border between Northern Ireland and the British mainland.

Negotiators will try to find a form of words to say that as long as the transition is extended long enough for the U.K. and EU to agree a free trade deal, the backstop will never be used.

But the devil is in the detail. There’s no guarantee the trade deal could be finalized in three years and the EU would expect the U.K. to sign up to some kind of customs union. The terms of that, including whether the U.K. would have an independent trade policy, could only be agreed after the U.K. has left. DM

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