Some details emerging now about the one year transition + two stage backstop idea @MichelBarnier has briefed member states on in Luxembourg.
Let’s recall what @theresa_may said in the Commons statement:
There might be a gap between the end of the transition and the beginning of a future trade deal - that would be when the original backstop would have to kick in.
There might be a gap between the end of the transition and the beginning of a future trade deal - that would be when the original backstop would have to kick in.
Instead Theresa May wants a Temporary Customs Arrangement to fill the gap instead, so the NI-specific backstop *doesn’t* have to kick in.
But, as we know, the Commission has concerns about how a TCA would work, what legal basis, how long it would last, how would it impact the EU’s own trade negotiations around the world etc
If you were relying on the existing two year transition, which, of course, delays the backstop, then there’s a risk those concerns aren’t addressed +the TCA doesn’t get sorted on time. And then the backstop would have to kick in - simply because you ran out of time to fix the TCA
But...what if you had an extension to the transition? That way you would have more time to make the Temporary Customs thing legally sound. And you have more credibility when you say the original backstop won’t be needed. You have more evidence to show that it won’t be needed.
And if you want an extension to the transition, you have to do it now - because it can only be extended through article 50 and the Withdrawal Agreement.
There are obvious downsides. The ERG will scream blue murder, as a another year transition means a year more of budget contributions, abiding by EU laws, free movement, and no say in how rules are made...
It would also complicate the EU’s seven year budget round MFF - is the UK contributing more or not, etc?
But there was a little known clause inserted in a General Affairs Council back in March which left open the option of extending the Transition if for whatever reason it was needed.
The appeal of this idea is that both sides would know that the UK would not want to stay in the Transition any longer than necessary - or any longer than their ability to show the backstop is not going to be needed (if indeed that is possible)
Important to remember: the TCA would not replace the backstop. It would be a way of ensuring that the backstop is not needed. The backstop would be there in the background, as a guarantee of no hard border no matter what trade/customs relationship transpires.
My understanding is that this is one idea from “the tunnel” that Michel Barnier felt comfortable briefing member states on. It does not mean the idea has been agreed, for even that the component parts have been agreed. But both sides obviously feel it has merit.
Nor will it be done in a rush during the summit. This will have to be worked on over the next weeks, if indeed it’s a runner. But the handy thing is that member states and the Task Force wd be open to the idea of a one year extension, and it could be readily whisked into the WA
The other possible selling point is that even if a one year extension is requested, the UK wouldn’t necessarily need to use it all.
Let’s see. Over and out...
