Peter Foster @pmdfoster Europe Editor of the Daily Telegraph. Formerly based in Washington DC, Beijing and New Delhi. Opinions my own. Oct. 02, 2018 4 min read

What's happening in #Brexit...lots of noise about on the post Salzburg plan... here's what I know, with inputs from both sides.


So let's start with the post-Salzburg plan. Multiple versions about - I've written on Chequers 2.0, as has @SamuelMarcLowe and @JohnSpringford of @CER_EU whose paper is here:  /2

The shorter version is this:

1) All-UK for customs on NI backstop, but accept SM checks unique to NI, with some de-dramatised checks (for regs) on NI-GB border.

2) To move to park the NI customs backstop stand-off by agreeing a "Temporary Customs Arrangement" /3

The TCA will seek the UK accept common external tariff, and necessary elements of EU Common Commercial Policy (CCP) to cover goods, but leave door open for UK to negotiate on services.

All this, while leaving door open to a future fix on Irish border. /4

Bloomberg reported a version of yesterday too, then @oliver_wright at The Times put a political gloss on this from #CPC18 pointing out it would constrain UK trade deal making until such time as the 'new regime' came in. /5

Two big questions arise - can May sell this to the EU; can she sell it to her party or Parliament in Westminster?

Let's take one at a time. First the EU side of things: /6

Right from the get-go, the EU has argued that splitting the Single Market four freedoms would be more damaging than a 'no deal'.

As I reported on Steph Riso's July 5 presentation, the C'ion has argued it could cost the SAME as a 'no deal' to the UK. /7 

The question is whether deeper UK level-playing field guarantees, money and Customs Union offer is enough to assuage those fears - as some like @CER_Grant suggest is *possible*.?

My own enquiries in Berlin, Paris, Brussels make me doubt this. /8

When you bounce these concessions off the EU - as a mechanism to obtain essentially a 'single market' for goods with a derogation on free movement, officials blanche. Literally. They worry UK "doesn't get it" (as at Salzburg) and is staking political capital on the impossible /9

Mujtaba Rahman of @EurasiaGroup who is properly connected in Paris, Berlin and Brussels hears the same.

His note to clients this morning is, to put it mildly, not exactly encouraging /10

The UK side says the EU isn't quite this robust in private, but the question I posed y'day remains.

Is the EU just trying screw concessions from Brits (fitting the handcuffs, so to speak)...

OR are the UK about to repeat Salzburg error all over again? /11

To be honest, I don't know the answer - and nor, honestly, do small Member State diplomats who I speak to, who quite fancy this deal - but don't know if Fr, De and Cion can be persuaded.

Given the wider Liberalism - Nationalism political context, it feels a bad time. /12

The Rahman point on EU wanting certainty on negotiating FTAs (hard with UK in a 'temporary' arrangement of uncertain duration) is persuasive.

As are DE/FR concerns that the politics of UK in a CU aren't sustainable. "Are you really prepared to put trade policy in EU hands?" /13

UK makes point that it buys time and also - crucially - that TCA only applies to customs, on Single Market regs, the de-dramatised checks are unique to Northern Ireland.

I understand UK accepts that GB-EU27 UK businesses get nothing on single market reg fixes. So friction. /14

So let's say May gets a deal which amounts to accepting a lot of Single Market regs, a Customs Union in all but name, and a free movement carve-out (recalling that UK is a NON member, so arguably not sending message to members, given frictions noted above) what then? /15

So here I'm straying from my own bailiwick into that of UK politics, so greater political minds than mine will have a more acute sense of whether Brexiteers can swallow 'temporary' vassalage.

But on that point, I note... /16

@bbclaurak @rafaelbehr @TomMcTague @tnewtondunn

That @ShankerASingham Plan B report for @iealondon explicitly accepts need for Temporary Customs Arrangement, including Common External Tariff for "time limited period" - which could mean a lot of things. /17 

Downing Street must calculate that a deal which keeps the trucks trucking, gives a carve out on Free Movement and dynamic reg alignment (to guard workers' rights) must hold attraction for some Labour MPs?

Enough to balance the ERG hardliners who won't stomach it? /18

To be clear, the British frog will have been pretty boiled at this point - Boris not really wrong on this - but "vassalage" is not nearly as imminent a political problem as no-deal "carnage".

So that'll be the choice: vassalage or carnage. /19

And of course, all the above contingent on overcoming objections of Fr, De, the Commission to seal a deal in the first place.

Buckle up. Bumps ahead I reckon.


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