May insists Britain leaving EU customs union

Michel Barnier Leo Varadkar

EU President Donald Tusk told her that it was too early to give any assurances because of the "disorientating" messages the EU was getting from London, the official said.

Britain has vowed to leave the EU's single market and customs union after Brexit, which legally takes place on March 29, 2019, but in effect will be delayed by a transition period lasting until December 31, 2021.

It is understood Downing Street is considering taking that language literally.

Mrs May allegedly told Conservative backbenchers of her concerns over Northern Ireland's future within the UK.

After months of British weakness in the face of an uncompromising Irish stance on the border post Brexit, there was yesterday the first inkling of toughness.

May has been struggling to unite her cabinet over the terms of Britain's divorce with the European Union, with a row over future customs arrangement dividing her government and all but stalling Brexit negotiations.

London has in theory agreed that if no solution can be found to keep the border open, Northern Ireland would be aligned with the European Union as a last resort - but this would break up the country and in reality would never be acceptable.

Theresa May Donald Tusk
Brexit - UK seeking previously unthought of 'third way' around the Northern Ireland customs border impasse

There is also a range of single market areas which are deemed essential for the smooth functioning of scores of areas of north south cooperation. The UK and European Union would both apply tariffs on goods and services and there would be no agreements that would ease the flow of trade between the two. The EU position seems to be that whilst permanent alignment with EU regulations and the external tariff would be welcome, a short term fudge would not.

The question of the future customs relationship between Europe and the United Kingdom has been simmering in the background for some time now but markets have largely ignored the issue as they wait for some clear guidance with traders opting to avoid getting caught up in a situation where they trade headlines, as was the case in 2017.

Later, Mrs May confirmed the UK's alternative "backstop" would be produced "in due course".

According to the newspaper, the Irish question may remain unresolved until 2023. But without an agreement on customs, those plans are as yet incomplete. The Irish Government has made it clear that it will veto a transitional deal if a hard border is imposed between it and Northern Ireland. Hardliners insist that a so-called "Max-Fac" (Maximum Facilitation) scenario is still possible, in which Ireland will have a seamless border with cameras alone.

Under this proposal, traders on an approved list or "trusted traders" would be able to cross borders freely with the aid of automated technology.

"We are committed to no new physical infrastructure at the border, no new checks or controls at the border".

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