Brexit Deal in Sight as Negotiators Start to Thrash Out Details

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Brexit Deal in Sight as Negotiators Start to Thrash Out Details(Bloomberg) -- Follow @Brexit, sign up to our Brexit Bulletin, and tell us your Brexit story. The U.K. and European Union signaled a Brexit deal is in sight, with negotiators heading into three days of intensive talks in Brussels as a potential compromise over the Irish border starts to emerge.On Friday, EU officials said that British Prime Minister Boris Johnson had indicated he was prepared to make sufficient concessions to allow detailed talks to begin. Teams from both sides started work Saturday to explore whether they can arrive at the basis of an accord ahead of a summit of EU leaders that begins Thursday. While the pound posted its biggest two-day gain in a decade as an agreement inched closer, both sides cautioned that much work remains to be done if Britain is to leave the EU by Johnson’s Oct. 31 deadline.At issue are the prime minister’s plans to take Northern Ireland out of Europe’s customs union and give Stormont, its power-sharing assembly, a veto over the arrangement. The first would trigger the return of checks on goods crossing the frontier, something Dublin and the EU are opposed to, while the second would hand the Democratic Unionist Party an effective veto over the deal, something unacceptable south of the border.One possible compromise negotiators are focusing on is a British idea for Northern Ireland to technically leave Europe’s customs union but for the province to adhere to the bloc’s customs rules and tariffs, according to two officials. This would have the twin benefit of preventing a border on the island of Ireland and enabling the U.K. to strike trade deals around the world.It’s similar to a “customs partnership” plan the EU rejected in 2018, and would leave Northern Ireland with a different customs regime to the rest of the U.K. British authorities would have to collect tariffs on behalf of the bloc on goods crossing the Irish sea. EU officials said the proposal is extremely complicated and needs work before it could be considered to be a solution, but didn’t rule out it becoming the eventual compromise.EU officials think the only sure-fire solution will be an arrangement that keeps Northern Ireland in the customs union -- the so-called backstop. While there’s no discussion yet of putting a time limit on that arrangement, something the EU has previously rejected, one EU official said that it could yet be considered.In a meeting with envoys of the bloc’s remaining 27 countries on Friday, the EU’s chief Brexit negotiator, Michel Barnier, suggested that Johnson is softening his stance on both customs and Stormont’s consent. In what would potentially be a significant climb-down, Johnson acknowledged there should be no customs border on the island of Ireland, two officials said. When asked in a pooled interview for British television, Johnson declined to say whether Northern Ireland will leave the EU’s customs union.“There is a joint feeling that there is a way forward, that we can see a pathway to a deal,” he said. “That doesn’t mean it’s a done deal. There’s work to be done.”Can Johnson Get a Deal Through Parliament? Silence Is GoldenAny agreement would have to be backed by Parliament in London, where Johnson is reliant on the DUP. The group is staunchly opposed to the region being subject to different customs rules to the rest of the U.K.In a statement, DUP Leader Arlene Foster fired a warning shot against any attempt to keep Northern Ireland in the EU customs union, although, crucially, she didn’t go as far as explicitly withholding support from the prime minister.“Those who know anything about Northern Ireland will appreciate that these issues will only work with the support of the unionist as well as the nationalist community,” she said.‘Workable, Realistic Proposal’While negotiations are heading into a new intensive phase, they aren’t headed into the full “tunnel,” the formal Brussels process by which the actual legal text of an agreement is thrashed out in secret.This suggests that the EU still has reservations about the chances of getting a deal done, and that member states are unwilling to outsource the process entirely to Barnier and his team.The European Commission will update the EU’s national envoys Sunday, with the aim of having something concrete for EU affairs ministers to look at when they meet in Luxembourg on Tuesday to prepare for the summit.For all the fresh optimism, there is still a long way to go.European Council President Donald Tusk said the U.K. hadn’t yet “come forward with a workable, realistic proposal.” But he added that he had seen “promising signals.” The next week will see whether those noises turn into an agreement on paper.(Adds detail of British proposal from fourth paragraph.)\--With assistance from Dara Doyle, Nikos Chrysoloras and Alexander Weber.To contact the reporter on this story: Ian Wishart in Brussels at iwishart@bloomberg.netTo contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Edward Evans, Robert JamesonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.


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