It's no Magna Carta, but a new paper from the British government outlines a potential future for the United Kingdom. On Aug. 15, the British government published a strategy paper on Brexit in preparation for a new round of negotiations with the European Union scheduled to begin Aug. 28. It proposes establishing a temporary customs union between the United Kingdom and the European Union during the Brexit transition period beginning in March 2019, confirming London's desire to buy more time to negotiate a permanent settlement.
The document is the first in a new series of position papers to be published in the run-up to October, when the British Parliament and the European Council will publish two separate assessments on how much progress has been made toward resolving three major Brexit issues: the Brexit bill, citizens' rights, and the Irish border. According to the proposal, the United Kingdom would be able to negotiate new trade deals while remaining in a temporary customs union with the European Union. The new deals, however, would only be implemented after the United Kingdom has left the interim stage and Brexit has been fully enacted.
According to the British paper, the United Kingdom and European Union would then establish a customs partnership with no internal customs border. The United Kingdom would also be required to mirror EU tariffs on imported goods whose final destination is in the European Union. The alternative option would be a highly streamlined arrangement, under which the United Kingdom would impose the same conditions as the European Union on international customs and collect customs duties on its behalf. This second option would require a customs border — including one between Northern Ireland and the Republic of Ireland — which would utilize technology to minimize the need for physical checks.
The European Union replied to the paper on the same day of its release, saying the issue concerns bilateral relations and cannot be addressed before sufficient progress has been made in negotiating the details of Brexit. The United Kingdom, for its part, insists that its withdrawal from the European Union and its future relationship to it are inextricably linked. British Brexit Secretary David Davis said on Aug. 15 that the United Kingdom will not commit to a number for the Brexit bill before the European Council meets in October. However, chief Brexit negotiator for the European Union Michel Barnier responded to the British paper by saying that the sooner withdrawal negotiations are successful, the sooner discussion of a future relationship — including a customs arrangement — can begin.
The plan outlined by the British paper is expected to be met with resistance within the European Union. Europeans have already made it clear that the United Kingdom will not be able to negotiate trade deals while it's in a customs union. On Aug. 15, a spokesman from the European Commission reiterated Barnier's statement, saying that frictionless trade is not possible outside the single market and customs union. When it comes to trade with the European Union, the United Kingdom won't be able to have its cake and eat it too.
