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Is a #Brexit deal possible? We're at 20%. That % has received a lot of flack on Twitter (too high!) but I think it's right - basically a deal is possible, but unlikely. Short thread 1/
First what's likely shape of deal? Again important to recognise that @10DowningStreet no longer committed to "frictionless trade" between NI & ROI per @DavidGHFrost meets in Bxl. Instead, only seeking to "facilitate" trade. There'll be a border. Govt seeking to soften it. How? 2/
All Ireland SPS zone, electricity market & common travel area are most commonly cited features. What else? This - the scope - is what's currently being discussed. Obvious tricky issues include customs, VAT, manufactured goods & governance (Stormont & ECJ) 3/
What is not covered in this all Island regime will be subject to checks & controls. To the extent possible, these will be displaced - "de dramatised" "declocalised" - to avoid reigniting tensions on the NI/ROI border. AA would also play role - increasing over time 4/
This isn't backstop. But again, UK Govt is no longer committed to objectives of backstop - completely frictionless trade. It has a different approach informed by a different set of political objectives. Exiting the CU & SM is designed to deliver trade sovereignty for entire UK 5/
(Incl NI, as it won't be in EU CU). And any new frictions that emerge would be very imperfectly ironed out by elements described above. So what Govt is doing - per Berlin/Paris meets is that @BorisJohnson is trying to show EU how border would work in a Canada minus (-) world 6/
The message conveyed to him in Berlin, Paris & Biarritz was that if he can do that - while respecting GFA & SM - then the backstop would become redundant. Ultimately, if this plan works, it will leave NI-EU in a very different economic relationship to GB-EU 7/
Those differences would likely grow over time - as NI remains more (but not fully) aligned to the SM and GB does trade deals with the rest of the world. But this isn't the NI-backstop - as NI would not be in EU CU, at least according to Govt's plans. Can EU agree? 8/
Again: This is far away from backstop. Lots of gaps & diff issues to resolve (per above). Compounded by UK position on LPF (don't want to maintain current EU standards once UK has left; full freedom to diverge in future). It ultimately depends on EU's tolerance for risks to SM 9/
But as one senior UK official argues "Are we increasing the risk or simply changing the way we manage those risk?" Also depends on EU's willingness to have NI treated distinctly - as a special economic zone - & differently to GB. Some concern in Berlin and elsewhere that 10/
a favourable regime for NI would set a precedent for GB: EU has always felt UK negotiators are instrumentalising NI to secure an economically beneficial deal for whole UK - they point to UK-wide backstop as one clear example of that. But as I & @CER_Grant have argued 11/
Something is afoot. Berlin IS worried about political implications of no deal. Dare I say it, economics IS also playing a role (but of course, a much smaller one). Paris also seeing through October Council and UK elections. They see another hung parliament & inability of Govt 12/
that emerges to articulate a credible position on a Brexit landing zone. This isn't leading French to veto A50 extension (little to no chance of that) but rather trying to facilitate deal. Don't want UK Brexit psychodrama to keep undermining EU business - not least as budget 13/
negotiations come to a head next summer where clarity on whether UK is in or out will be needed. So substantive gaps are real. But could be bridged by political will. Commons majority becomes a problem here. A deal along lines described above requires real pragmatism from EU 14/
Compared to principles approach its taken thus far. & if EU doesn't believe a majority is there in Parliament, why would they move? We think there could (just) be a majority coalition of MPs in Parly to get such a deal through. Bulk of Tory party; those MPs that lost whip & 15/
Labour leave MPs. But @SKinnock group unlikely to sign up to Canada minus (-). @jeremycorbyn will oppose whatever deal BJ does. DUP could probs swallow a regulatory border in Irish Sea but not a customs one - so unclear. But ultimately, numbers are going to very, very 16/
challenging indeed. This will filter back into negotiations, affecting EU's incentive to move. So is deal possible? Yes. Is it likely? At this stage - no. 20% is probs right number. That could increase/fall in run up to Oct Council depending on events between now & then ENDS
