The central plank of Theresa May’s Brexit plan has been dismissed by the EU’s chief negotiator Michel Barnier after he said Brussels won’t allow the UK to collect tariffs on its behalf.
At the heart of the Prime Minister’s plan, set out in a white paper a fortnight ago, is a “facilitated customs arrangement” under which tariffs charged at the border would be passed on to either the British or EU authorities depending on the destination of imported goods.
Appearing alongside new Brexit Secretary Dominic Raab following their second round of talks in Brussels, Barnier left no doubt that this was not acceptable to the EU.
“The EU cannot and the EU will not delegate the application of its customs policy and and rules and VAT and excises duty collection to a non-member who would not be subject to the EU’s governance structures,” he said.
Any customs arrangement or union “must respect this principle”.
Raab signalled that he is looking for compromise from Brussels in response to May’s white paper, noting that the EU was able to take an “innovative” approach “when the political will has been there”.
And he appeared to be making an attempt to separate the thorny issue of the Irish border from the rest of the Withdrawal Agreement which is due to be settled by October, repeatedly referring to a “protocol” on Northern Ireland.
The EU negotiator bluntly rebuffed Raab’s suggestion that the UK might tear up its promise to pay a £39 billion “divorce bill” unless it got a good deal on future trade.
Barnier told him that, while the commitment to a financial settlement made by May in December was not yet in its final legal form, the 27 remaining EU members and European Parliament regard it as “agreed for good”.
He also made clear that Brussels still has reservations about May’s proposed “backstop” arrangement for the Irish border, which would see the whole UK matching EU trade tariffs for a period if a trade deal is not reached by 2021.
“We have no objection in principle to this but we have doubts that it can be done without putting at risk the integrity of our customs union or commercial policy our regulatory policy,” said Barnier.