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Irish Border Throws Unexpected Hurdle Into Brexit Talks

Bloomberg logoBloomberg 10/11/2017 Emma Ross-Thomas, Ian Wishart and Tim Ross

Watch: 'Hard Irish border if UK leaves customs union' (Sky News)

The future of the Irish border erupted unexpectedly into Brexit talks this week, as the European Union made new demands on Britain that risk distracting from efforts to reach a breakthrough by year-end.

The EU circulated a document to diplomats that called for Northern Ireland to maintain the rules of the customs union and single market after Brexit. It says there must be no hard border on the island, meaning regulations have to be the same on each side of the line that will become the U.K.’s land frontier with the EU after Brexit.

The Irish issue, while one of the three divorce issues that need to be settled in the first phase of talks, had taken a back seat in recent months as the U.K. argued that it would be easier to find an agreement on the gnarly border issue once the future trading relationship was clear.

A European Union (EU) flag, top, flies alongside the Irish national flag in Dublin, Ireland, on Tuesday, Nov.16, 2010.: Irish Border Throws Unexpected Hurdle Into Brexit Talks © Bloomberg/Bloomberg Irish Border Throws Unexpected Hurdle Into Brexit Talks

Related: Why the Northern Irish border is a nightmare that could ultimately derail Brexit

© Business Insider

Its re-emergence as an obstacle late Thursday distracted attention from what appeared to be some carefully choreographed efforts by the U.K. government to get euroskeptic critics onside as it prepares the ground for the concessions it may have to make to Europe in the next few weeks.

For the first time, the prospect that talks would fail to reach a breakthrough by year-end was raised, with Polish European Minister Konrad Szymanski -- who met Brexit Secretary David Davis this week in Warsaw -- saying it may be pushed back to March.

© Bloomberg The EU’s demands on Ireland in the memo are all but impossible for Britain, unless the whole U.K. stays in the customs union, which Prime Minister Theresa May has ruled out. Allowing Northern Ireland to stay in the customs union could mean putting a border between it and mainland Britain.

That’s unthinkable for the U.K., and more so at a time when the Conservative government is propped up by the pro-U.K. Democratic Unionist Party from Northern Ireland. The DUP would quit before accepting a border in the Irish Sea.

“We recognize the solutions to the unique circumstances in Northern Ireland must respect the integrity of the EU single market and customs union,” Davis’s department said in response. “But they must also respect the integrity of the United Kingdom.”

Ireland also appeared to accept that the notion that special status for Northern Ireland presents difficulties.

© AP

“What we want is a solution that applies for Northern Ireland and Britain as a whole so that we don’t have these difficult debates around treating Northern Ireland differently to the rest of Britain,” Irish Foreign Minister Simon Coveney said in an interview with broadcaster RTE. “That’s why the Irish position has been for some time that we would like to see Britain remaining in the same customs union as the rest of the EU.”

Ireland has consistently argued that the U.K. remaining in the customs union would be the easiest way to avoid a new border. But May insists Britain will leave as it can’t strike trade deals around the world otherwise -- a key part of the pro-Brexit narrative.

Ireland is aware that it essentially has veto power now, and once talks move on to trade it will be just one of 27 countries fighting to get its voice heard. It has been considering seeking explicit guarantees on the border as a condition for progress in talks.

Coveney welcomes the fact that the EU position is in “harness” with the Irish stance, and said there’s a“way to go” between the bloc and the U.K. to allow talks to progress.

Wooing the Brexit Camp

The Irish government said that the U.K. must make “strong and tangible commitments” to avoid a hard border. It would like the whole U.K. to remain in the customs union and single market, but failing that, wants to avoid on the island of Ireland “any regulatory divergence from the rules of the EU Internal Market and Customs Union.”

Back in London, Brexit Secretary David Davis was reassuring the City that banks were high up on his negotiating priority list and May was making overtures to the pro-Brexit camp in her party. The U.K. government will propose an amendment to its landmark Brexit legislation so that the date of Brexit is enshrined in law.

The move, which will delight euroskeptics, will also discourage the growing wave of speculation about how Brexit could be reversed or delayed. May, who appointed a pro-Brexit minister to her cabinet on Thursday, also used firm words in an editorial in the Brexit-backing Telegraph that she won’t tolerate any attempts by lawmakers to use amendments to the legislation to “try to block the democratic wishes of the British people by attempting to slow down or stop our departure from the European Union.”

The overture to those parts of the Conservative Party most enthusiastic about Brexit comes just as the government needs to improve its offer on the financial settlement it owes the EU before a year-end deadline.

A summit in December is the target both sides are aiming for to get a deal on the divorce, so that talks can move on to the future trade relationship. With the EU asking for about 60 billion euros ($70 billion) and the U.K. so far offering about a third of that, the U.K. side needs to move if it wants to start trade talks.

Euroskeptics have been an obstacle to making a settlement, as some argue that the U.K. doesn’t need to pay anything as it leaves. The EU argues it needs to meet the financial commitments it made as a member of the club.

NOW SEE: The Brexit bill: Will Britain pay up?

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