BRUSSELS (Sept 7): European Union chief negotiator Michel Barnier said "lots” of the UK’s blueprint for post-Brexit relations are "useful" and that he’s open to new ideas to fix the Irish border problem. His positive spin on the divorce talks boosted the pound.
“In the White Paper there are lots of positive things, lots of useful things, just to make that absolutely clear,” Barnier told a delegation of UK lawmakers on Monday, according to an official transcript. “I did not just reject the White Paper outright; that is just not true.”
He also reiterated that he is open to alternative suggestions for keeping the Irish border open after the divorce. That’s a major hurdle that needs to be overcome before an agreement can be reached. Still, Barnier went on to say there were “major problems” with the UK’s vision for a future customs arrangement and its plan to pick and choose parts of the bloc’s single market.
The comments add to evidence that the two sides are working on getting a divorce deal secured, and could be willing to postpone some of the more difficult decisions about what the future relationship should look like until after exit day.
Earlier this week, Bloomberg reported that the British and German governments now prepared to put off some of the more detailed discussions about the future relationship until after Britain has left, a shift that could make it easier to reach a divorce deal.
The pound rose 0.5% to US$1.3000 after the transcript was released.
Brexit is in two parts: first the separation agreement to make sure the exit is orderly, and then the future trade accord, which won’t be negotiated until after the UK leaves. Initially, the British side was aiming for a draft legal text setting out the future trade agreement before the country leaves the bloc. Until recently, Germany also wanted a very detailed blueprint.
Barnier said agreement over the future has to be “quite detailed.” He told the British lawmakers: “You need clarity and we also need clarity on our side.”
The two sides are aiming for a divorce deal by mid-November so that the British and European parliaments can approve it by the time the UK leaves on March 29.
Barnier appeared to soften his language on EU demands for a hard customs border between Northern Ireland and Ireland. Prime Minister Theresa May has rejected the EU’s version of the “backstop” because it would see Northern Ireland operating under different rules from the rest of the UK.
‘We Are Open’
“We are open to discussing other backstops, so we can discuss this text, we can make changes to it,” Barnier said. “We are ready to simplify these checks” on goods moving between Ireland and the UK after Brexit, “to have them carried out at a number of different places and have checks, thanks to technical means, which could take different forms.”
The UK’s wider proposals for a temporary customs arrangement, which would see the UK keep the EU’s tariff regime after leaving the bloc while being able to strike global trade deals and is aimed at avoiding the need for a backstop for the Irish border, won’t work, Barnier said.
“The British solutions mooted, such as a temporary customs arrangement, which suggests such a distinction between customs checks and regulatory checks, would turn out to be impossible, technically speaking, for us to implement,” Barnier said.