David Davis could be forgiven a wry chuckle today. For what he warned Theresa May about has come to pass: Michel Barnier has made clear that the EU Commission can’t accept Theresa May’s proposed facilitated customs arrangement as it won’t have a third country (ie, the UK) collecting tariffs on its behalf:
‘The EU cannot and the EU will not delegate the application of its customs policy and rules and VAT and excises duty collection to a non-member who would not be subject to the EU’s governance structures.’
This was the main point of the Chequers offer: that Britain would have frictionless trade with the rest of the EU by making itself an EU buffer zone.
Barnier said in his press conference with Dominic Raab that the EU is still open to the UK staying in the customs union; the UK side has long known that this is Barnier’s preferred option. But Theresa May doesn’t want that, and her party would never allow that.
She has repeatedly said that, once Brexit is done, the UK will be outside the customs union and the common commercial policy and able to do its own trade deals. Also, if May did agree to staying in the Customs Union more Brexiteers would resign from the Cabinet, and it is doubtful whether she could survive that.
So, where do we go from here? Well, lots of Tories will say that if the facilitated customs arrangement can’t fly, then it is time to turn to max fac, and accept some friction at the border. But Downing Street’s issue with max fac was that it didn’t solve the problem of what May signed up to on the Irish border in December.
If there was a positive for the government from the press conference, it is that real progress is now being made on the security side of things. But the backstop and the broader Irish question continue to overshadow everything else.