Here's why the Brexit 'backstop' is now the most important issue facing Britain

  • Explained: The Brexit “backstop” and why it could be the difference between deal or no deal.
  • The EU wants Britain to agree to a fallback option for avoiding a hard Irish border.
  • However, the EU’s demands are political suicide for Theresa May, while the UK’s demands are unacceptable to Brussels.
  • There will be no withdrawal deal unless the two sides find a compromise.

LONDON – With just a few months left to run in Brexit talks, a number major issues are still a long way from being resolved. Chief among them is the delicate issue of the Irish border.

Theresa May has promised that there will be no physical infrastructure on the border between Northern Ireland and the Republic after Brexit. However, her policy of leaving the single market and customs union is making this very difficult to achieve.

With May’s cabinet deadlocked over the issue, the increasing possibility of her government failing to find a solution for the Irish means the EU wants to protect the island of Ireland by signing Britain up to a “backstop.”

So what does that means and how would it work?

What is the “backstop”?

British negotiators have consistently argued that the key to unlocking the Irish border problem will be in the EU agreeing a trade deal with the UK. The prime minister has outlined her vision for a bold, wide-ranging free trade deal with the EU, unprecedented in depth, which will eliminate the need for regulatory checks on the border after Brexit.

This, combined with a comprehensive customs agreement, the British side argues, will preserve the Irish border in its current form.

However, although the EU is also hopeful of a comprehensive deal, it is worried that the UK government’s red lines on leaving the customs union, single market and jurisdiction of the European Court of Justice mean any future trade deal will be limited, and may not prevent the need for border infrastructure. There is also very little time to secure any deal before the proposed near-two year transition period comes to an end in December 2020.

Because of this, the EU wants Britain to agree to a “backstop” – a fallback option, in effect – which would protect the status quo in on the island of Ireland should negotiations fail to produce an acceptable solution.

What form would the backstop take?

This is where the UK and EU don’t quite see eye-to-eye.

The EU believes the backstop should be Northern Ireland effectively staying in the single market when it comes to goods, plus the customs union, until the UK government has come up with a workable solution for the Irish border. Given that the government’s current proposals – “max fac” and a “new customs partnership” – could take up to five years to implement, Northern Ireland could remain wedded to the EU for some time after the rest of the UK has left.

To the EU, a Northern Ireland-only backstop is the only acceptable way of preserving an invisible Irish border. However, signing up to such a deal would represent political suicide for a prime minister whose leadership is already being threatened by hardline Brexit supporters in her party.

Keeping Northern Ireland wedded to the EU would also create a border between Northern Ireland and the rest of the UK in the Irish sea, effectively slicing the UK down the middle. The Democratic Unionist Party, which props up the Conservative government, is clear that it will not support any Brexit which results in of divergence between Northern Ireland and the rest of the UK. May will need the DUP’s support to get Brexit legislation passed. Agreeing to a backstop could, therefore, could trigger her own downfall.

So what does the UK want instead?

According to reports, May wants the backstop to mean the whole of the UK stays in the customs union for a limited period of time after the transition period comes to an end. The idea was approved by her Cabinet last month and then put to EU leaders like Irish Taoiseach, Leo Varadkar. Under this proposal, Britain would cease to be an EU member state in March 2019; remain in the single market and customs until December 2020; then stay in the customs union for a several more years after that.

This, in theory, would give the UK the time it needs to prepare a new customs arrangement.

What’s the EU’s problem with this?

Brussels has two major issues with this proposal.

The first relates to time. May wants the backstop to be time-limited, meaning it will come to an end after a pre-agreed length of time e.g five years. However, the EU believes that a time-limited backstop would be self-defeating, as this means it could come to an end without a workable solution for the Irish border in place and ready to go.

“A strictly time-limited backstop would defeat the purpose of the backstop,” a senior EU official said last week.

A source close to the EU’s Brexit taskforce told Business Insider that the EU will include a clause in the Withdrawal Agreement to ensure that the backstop will only cease once Britain has found a way of avoiding a hard border.

The second relates to who is involved.

Prime Minister May wants any backstop to be UK-wide. However, the EU isn’t particularly keen on the idea, as it believes this risks leaving Britain benefiting from both the customs union and single market for years after Brexit – but without any of the obligations that full membership would entail.

How important is this to Brexit negotiations?

Very. There have been suggestions that the British side can simply delay a decision on the Irish border and use the transition period to sort it out. However, the terms of these negotiations mean that there’ll be no withdrawal agreement unless all issues within it are resolved. As both sides have repeatedly insisted “nothing is agreed until everything is agreed.” Basically, this means there can neither be a transition period or an agreement on future trade without the backstop. Reaching an agreement on this is key to a deal being signed.

Agreeing on what the backstop will look like has, therefore, become the central and most urgent issue in Brexit talks. As trade expert, Sam Lowe, wrote for BI last month: “The can kicking cannot go on forever.”

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