LEADING THE WAY OUT OF THE EU

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Tuesday 3 July 2018

Yesterday’s Brexit Brunch speculated Theresa May’s upcoming “third way” solution to the customs dilemma will be a goods only Single Market arrangement – basically the Customs Union, plus agriculture. Not so, says today’s FT, instead a surprisingly emboldened PM is reverting to her daft New Customs Partnership idea. May pitched the customs partnership to Cabinet ministers in April. It was rejected for being unworkable.

Like Max-Fac, the high-tech border solution intended to track the passage of goods that the EU has resoundingly rejected, the partnership concept can only function if customs authorities are able to follow the transport of all goods entering and leaving the UK. If adopted, Britain would continue to remain part of the EU’s external border, but would offer discounts on tariffs to third countries with a view to even more favourable access for preferred partners like the US and Australia. The system would only work so long as goods accessing the UK merely for transit are recorded so that the discount is not applied, and the tariffs collected can be passed onto the EU. Brussels is not a fan of the idea.

The FT quotes an ally of the prime minister who is said to be enamoured with the solution cooked up by her Brexit advisor, Olly Robbins:
“She doesn’t want to get in the way of British business. She feels very strongly about maintaining frictionless trade.”

Robbins has been extremely active in Brussels, and it seemed likely he’d won Michel Barnier over to the goods only deal. Such an arrangement would be a total betrayal of the referendum, but it does not fit into the EU’s restricted Norway or Canada menu. Whether It’s the goods option or the customs partnership, Robbins has been in the pathetic situation of arguing for a UK position both unacceptable to Brussels and the British electorate.

Nothing will be revealed until the meeting at Chequers on Friday however, leaving the Cabinet Brexiteers sidelined and frustrated. They’re not the only ones.

Boris Johnson took the unusual step for a senior minister of welcoming Jacob Rees-Mogg’s severe warning to May against forcing through any of these terrible options and giving into other EU demands like open borders and judicial oversight (see below).

“There is a sense that a big sellout is on its way,” a close associate of a cabinet Brexiteer told the FT.

Another told the Times: “It feels like the wild west…We are all being kept in the dark.”

No surprise then that Cabinet Brexiteers are threatening to “walk” if the terms proposed by May contradict the popular will.

“We could find the government collapses on Friday night,” a heavyweight Tory MP told the Express.

“If she crosses the Brexit red lines, and it looks like she is going to, then the Brexiteers will withdraw their support for her and Boris, David Davis and the other Brexit ministers will walk.”

A former minister said: “Pro-Brexit MPs are ready and willing to pull the trigger. Friday looks as though it could be the day that decides the Prime Minister’s fate.”

Let us hope they do. We are at the stage now where a collapsed government is more likely to deliver a true Brexit compared to the frightened Mrs May.

Angela Merkel succeeded in neutralising Horst Seehofer, the leader of sister party the CSU and Germany’s interior minister. Seehofer had been pushing for a unilateral hardline approach to asylum seekers. Shutting off the border in Germany to illegals would help disincentivize the perilous journey across the Med to Italy, currently the transit country of choice. Needless to say, his stance has been a big hit.

Disappointingly, the standoff has been resolved through a particularly treacly compromise involving so-called transit zones that will supposedly facilitate deportations of failed asylum applicants, a minor change from the status quo. Politico have a solid write-up