Brussels scoffs at Britain’s customs proposal ahead of Brexit talks

EU diplomats will meet on Thursday to discuss the proposals and prepare for official negotiations next week.

The U.K.’s “fairy tale” plan for post-Brexit customs arrangements with the EU will be a key topic of discussion Thursday at a crucial Brussels meeting ahead of the next round of official Brexit negotiations next week.

EU diplomats from the 27 remaining member countries will be briefed by Stéphanie Riso, a senior member of the EU’s Brexit negotiating team, on the current state of the talks and on the bloc’s reaction to U.K. position papers released last week on post-Brexit customs arrangements and the Northern Irish border.

According to five senior diplomats involved in the negotiations, the U.K.’s proposals have found little favor in Brussels. “The solution proposed by London on customs and the Irish border sounds like a fairy tale,” said one diplomatic official. “If you read through the two papers, most of them are about how not to ruin things and not on how to fix them.”

A second diplomat said the British proposals aspired to maintain the status quo on EU customs while avoiding the long list of obligations that stem from being a full EU member.

“We feel with customs, the Brits are cherry-picking. Some of their proposals could work since they are based on arrangements in place for Norway and Switzerland,” said a third diplomat. “The problem is the U.K. does not have a good track record,” he added.

The meeting — which comes ahead of the third round of official negotiations with the U.K. in Brussels — is intended to allow representatives of the member countries to discuss the bloc’s position in next week’s talks with Commission officials.

EU officials regard the flurry of position papers published by the U.K. in the last two weeks as a distraction tactic, intended to gloss over Britain’s failure — in the eyes of the EU — to engage substantively on key separation issues such as the Brexit bill.

But the mere fact that the EU is discussing the U.K.’s customs proposals will be seen as a victory in London. The EU has been adamant that it will not engage with anything to do with the U.K.’s future relationship with the bloc until the talks have achieved “sufficient progress” on the divorce.

The customs position paper was the first in the latest round of publications. It laid out proposals for a transitional arrangement followed by two options for a long-term customs arrangement that would mean minimal border checks while at the same time allowing the U.K. to leave the EU customs union and strike its own trade deals.

The issue has huge economic ramifications for the U.K., since imports and exports represent about one-third of gross domestic product in Britain.  

Goodwill for the U.K. on the customs issue is in short supply in Brussels though. It is currently undergoing infringement procedures in the EU for falling short on VAT collection. And the EU’s anti-fraud office determined in March that Britain’s customs authorities deliberately ignored a massive fraud network — which is still ongoing — orchestrated by Chinese textiles and footwear exporters. The U.K. is facing a €2 billion bill for turning a blind eye to the fraud.

Diplomats in Brussels are doubtful that the U.K. customs authority has the capacity to deal with beefed-up customs checks post Brexit.

The main stumbling block for the EU in the U.K.’s proposals though, is the notion that it simply wants to maintain the positive aspects of EU membership without having to comply with the obligations that come with being a full member.

That has left many in Brussels wondering why the U.K. now wants to leave the Union.

“They basically want to maintain the status quo, without having to comply with the obligations you have to incur when you are a full EU member. They want customs and Ireland à la carte,” one of the diplomats said.

Despite what is being perceived as wishful thinking from the U.K., analysts looking at the current options on the table for London believe no post-Brexit scenario will be pain-free.

A report by the Institute for Government released last week said “there is no model of future relationship that can offer traders ‘the exact same benefits’ as EU membership.”

POLITICO approached the U.K. Department for Exiting the European Union for comment but did not receive a response by the time of publication.