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Peter Foster @pmdfoster
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Lots of noise around on #Brexit and customs today. The 'war' cabinet couldn't make decision. Here's what I know from sources in London, Dublin and Brussels. /1
The Olly Robbins presentation to cabinet heavily favoured the idea of a 'customs partnership' over a 'streamlined' or 'MaxFac' solution - still basically the two options outlined in the August customs paper here, and regurgitated at Mansion House /2…
Even though the CP has been dismissed as 'magical thinking' etc, the govt is not giving up on the idea.

Why? Because, if it worked, it's the only way to get an All-UK solution on customs, avoid a goods border in Irish Sea and preserve some independent trade policy /3
Can it really work? It was dismissed by EU last month for three reasons

a) UK as 3rd country can't be trusted to collect tariffs for EU
b) puts burden on business
c) too expensive and hard for EU own customs machinery.

So why would they accept it now? /4
Well, per source, next time it is presented (IF cabinet agrees to it) it will look more "realistic" to the EU.

What does that mean? Good question.

Per industry source, the UKG has been testing it with some companies in NI. I don't know which. Am told they signed NDAs. /5
Perhaps the men from McKinsey did/can make it work?

But even if the tech did work, it would require UK to subscribed to a lot of ECJ oversight to fix objection a) above. And maybe other intrusive elements, like EU spot checks. Could cost too. /6
It still all seems pretty far-fetched as @jl_owen notes here for Institute for govt.…

But still interesting that serious people are trying to make it work - it's not just Theresa May delusion, apparently. /7
Part of the problem is to consider the alternative.

The ERG do a pretty good job of demolishing the CP in their 30-page report.

It won't be ready til 2023 and will require such levels of alignment, the UK ends up in what looks very much like vassalage /8
Where ERG and @Jacob_Rees_Mogg fall down hopelessly is in describing the value of a "MaxFac" as part of a basic FTA, where UK is outside Customs Union, when UK economy is reliant on services.

This para almost admits as much. /9
But what ERG glosses over is that 'MaxFac' will NOT fix Ireland, where I just spent two days.

This from JRM is simply wrong when he says border infrastructure can be avoided "with maximum facilitation" /10

This is because the EU will NOT - as Barnier keeps saying - create a backdoor/lacuna into the single market.

The UK proposal suggested SMEs were exempt - rejected. That's 80% of trade by value. No such exemptions exist in Norway-Sweden.

Trusted traders schemes also don't fly/11
In the real world JRM's version of 'maximum facilitation' doesn't exist.

In practice, "MaxFac", even if it were to be accepted, would only obviate border in NI by putting a border in Irish Sea to (per Barnier this week) keep safe the Single Market. He was explicit on this /12
Which brings us to the DUP.

The reality is the DUP is more pro-Union than it is pro Hard Brexit.

I understand from three sources DUP has made clear to No 10 it will accept UK-wide CU membership if that's price to avoid Irish Sea border.

Their priority is UK-wide solution /13
Of course, all this is academic if

a) the EU simply rejects the idea that even a more 'realistic' version of CP can be made to work and, even before that,

b) if Mrs May can sell it to her cabinet and face down ERG.

I defer to Westminster watchers on that. /14
The really tough part, as I've written before, is that it's hard to see a 'solution' to Ireland that doesn't leave the UK in a pretty abject relation to the EU, even if we can talk up value of services trade, BITs.

But walking away doesn't work either. And the EU knows it. /END
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