Thread by @pmdfoster

So @MrHarryCole is tired of idea that both UK customs options are 'killed off' - so this is a good moment to see where we are.

1/Thread

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As I reported (accurately) the EU subjected the UK's two positions to a "forensic annihilation" - not quite the same as "killing them off" - more pulling them apart. Let's look at each in turn, and where they are now /2

telegraph.co.uk/politics/2018/… just pulled them apart.

First 'MaxFac'

That option is still on the table. What the EU made clear is WHY it will not sort out the Irish Border question.

For it to work, the EU would need to agree to UK request to exempt 80% of business on that border - it won't. /3

I did a long thread on why MaxFac wont fix the Irish Q. And why EU and Dublin won't yield on this - see

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But to be clear, this is NOT the same "killing off" off the idea. /4

The UK can indeed have 'MaxFac', a Canada-style FTA and, likely, a zero-tariff deal on goods.

BUT that means it will also have:

- a goods border in the Irish Sea
- costly levels of friction/rules of origin issues etc
- hit to jobs and investment.

Choices, choices. /5

Now, what about the 'New Customs Partnership'?

This Mrs May's preferred idea of acting as a customs agent for EU, collecting tariffs on goods going into EU and UK companies getting to claim a rebate. HMRC hates, business doesn't believe in it, but it could solve border Q /6

Last August the EU called this 'magical thinking' and back at the 'forensic annihilation meeting they were similarly scathing.

But they did not, as @MrHarryCole says, kill it off. Instead they posed 5 questions to the UK side. I can now reveal what these were /7

1) how the UK could legally act as customs agent for the EU?

2) how the rebate mechanism would actually work?

3) how VAT and excise duties would be handled?

Continued... /8

4) how the model would deal with ‘rules of origin’ questions and

5) if the EU would have to mirror the expensive UK scheme at its own ports?

Interestingly, having rubbished this as "magical thinking" it now suddenly seems less "magical" /9

Now @campaignforleo tells Irish parliament it might be workable.

And as @IanWishart reports this morning, the EU are making similar noises. /10

bloomberg.com/news/articles/…

Why? Well as @nick_gutteridge and my colleague @asabenn have mooted, perhaps its because EU now realises that they need to help out Mrs May.

Their assumption Brexiteers would fold - as they did on bill, citizens etc - now seems misplaced. /11

telegraph.co.uk/politics/2018/…

Whitehall officials reckon they can answer these 'five questions' - at least technically.

Tho politically, given levels of alignment required to fix Irish border question, it looks pretty shaky tbh. Business also doesn't believe in it. /12

That said, the EU recognising that it could work, or at least agreeing to entertain its magical properties, might be the basis for short term fix - while everyone works on their tech solutions.

Of course the Irish backstop remains - but what if if cd somehow recognise NCP? /13

So in short, UK options are not dead, they are just not going to happen any time soon - 2023 at best case - and they won't deliver a cake n eat it Brexit.

The choices are there. The UK just needs to accept they need to be made on a realistic basis. There are no unicorns. 14/ENDS