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Brexit Treaty Would Keep UK in Customs Union Until End of 2020

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Theresa May defends the draft treaty in an address outside 10 Downing Street, Nov. 14 (Gov.uk)

By MarEx 2018-11-15 21:39:00

British Prime Minister Theresa May has released a hard won draft treaty on the Brexit transition, the product of years of painstaking negotiations with Brussels. It has drawn criticism from the opposition and from May's own party, and appears unlikely to win approval in Parliament. If it should, however, it would keep the UK within the EU customs union until January 2021, and potentially longer; provide arrangements for UK and EU citizens to travel freely between Britain and the continent; bring an end to UK financial institutions' easy access to EU markets; and end the European Court of Justice's jurisdiction in the UK. 

It also includes a controversial "backstop" provision to avoid a hard border on the island of Ireland, which is divided between the Republic of Ireland and the UK province of Northern Ireland. If the UK and the EU should fail to negotiate a long-term arrangement that would provide an alternative to a hard border before July 2020, the UK would remain within a "single customs territory" with the EU - an arrangement comparable to that in force today, but without British input into Brussels' customs rules. 

The reaction in London was dramatic. May's Brexit secretary, Dominic Raab, resigned Thursday in protest over what he described as "fatal flaws" in the plan. Work and Pensions minister Esther McVey followed suit shortly thereafter, along with five junior ministers and officials. Environment secretary Michael Gove turned down May's offer to succeed Raab as Brexit secretary, and as of Thursday night, Gove was said to be considering his own resignation. 

In Parliament, Labour leader and Brexit opponent Jeremy Corbyn called the plan "a botched deal that breaches the prime minister’s own red lines" that "will leave the country in an indefinite halfway house without a real say." If the deal does not pass Parliament, Corbyn said, a general election should be called - or a second referendum on Brexit. 

Tory leader and Brexit supporter Jacob Rees-Mogg called for a no-confidence vote on May's leadership. In order to force a vote, he would need to secure the support of 48 Tory MPs, and as of Thursday night several observers suggested that this threshold might be achieved. 

In a speech before Parliament on Thursday, May defied the criticism. "I believe with every fibre of my being that the course I have set out is the right one for our country and all our people," she said. May emphasized that the draft treaty would give the UK more control over domestic laws, immigration and monetary policy. 

The reaction among UK maritime interests was mixed. In a statement, the UK Major Ports Group - the association for large UK container ports - said that Britain's ports are "resilient and adaptable," and that "all complex deals need careful consideration." In the past, the association has called for free trade and policy clarity in the post-Brexit environment, while remaining agnostic on the details of the future UK-EU trading relationship. 

The British Ports Association - which includes the UK's smaller ports and ro/ro ports - said that it did not yet have certainty on what Prime Minister May's plan would ultimately mean. "The political situation being as such means that there are still several stages that the proposals will need to pass through. This means hauliers and freight operators using the UK’s network of ‘Roll-on Roll-off’ ports such as Dover, Holyhead, Immingham and Portsmouth will continue to be unsure what the post-Brexit border processes will look like," said British Ports Association CEO Richard Ballantyne in a statment. 

In a provisional review of the agreement, the UK National Federation of Fishermen's Organizations (NFFO) applauded provisions giving Britain more autonomy in controlling access to its EEZ. At present, vessels from other EU nations have automatic, equal access to Britain's fisheries, an unwelcome policy for British fishermen. "The European institutions – the Council of Ministers, the European Parliament and the European Commission – will no longer determine the rules under which vessels fish in UK waters. The implied corollary is that UK vessels fishing in EU waters will be subject to EU rules," the NFFO wrote.