Beyond the rhetoric, Britain, EU preparing to move forward on Brexit

BRUSSELS/BIRMINGHAM, England (Reuters) - “Unworkable”, “unacceptable”, “impasse” - the words used to describe Brexit talks between Britain and the European Union do little to temper concerns that the two are heading for a chaotic divorce.

Britain's Secretary of State for Exiting the European Union Dominic Raab delivers his keynote address to the Conservative Party Conference in Birmingham, Britain, October 1, 2018. REUTERS/Toby Melville

But behind the scenes, both sides are preparing concessions as part of what one British official called “a constructive dialogue” that could yet lead to a deal.

Officials and sources on both sides say there is clear will to try to overcome the obstacles to winning a withdrawal deal and agreeing a framework for future ties - a Northern Ireland border and EU-UK trade deal.

Details are scarce, but the EU is planning to start putting in writing its offer for future trade ties, a demand Britain has pressed after officials felt Prime Minister Theresa May was snubbed at talks in Austria last month.

Britain has also promised to bring a new proposal to unlock a standoff over preventing the return to a hard border between the British province of Northern Ireland and EU-member Ireland, possibly by compromising about regulatory controls on goods in exchange for Brussels embracing the use of technological fixes for customs checks.

With only six months to go before Britain leaves the bloc, the lack of clarity over the divorce has spooked markets by increasing the possibility of a no-deal Brexit, which both sides say they are working to avoid.

On Wednesday, May gives a speech to end a fractious annual conference of her Conservative Party, where Brexit rebels did much to undermine her stance of maintaining close ties with the EU.

On Thursday, Ireland’s Prime Minister Leo Varadkar will be in Brussels for talks with the EU’s Brexit negotiator Michel Barnier.

Senior diplomats in Brussels have been summoned to a Brexit meeting on Friday and Barnier is due to present to them an initial draft of the bloc’s trade proposal soon after, which the EU hopes would woo Britain into more compromises.

While no new dates have been confirmed for the next round of negotiations between Barnier and British Brexit minister Dominic Raab, several EU diplomats said they expected them to take place in Brussels next week.

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“It must be next week or it’s too late to get anything done within our six week schedule,” one person said, referring to a plan of having a preliminary Brexit deal at the next EU leaders’ summit on Oct.18.

The remaining 27 EU states are due to host a summit on Nov. 17-18 to sign off on any agreement with Britain. Otherwise, they would switch to contingency mode and focus on preparing for a no-deal Brexit in which Britain leaves next March with no agreements in place to mitigate the economic shock.

CUSTOMS VS. REGULATORY CHECKS

British officials have signaled new ideas will come. A focus will be attempts to come to agreement over customs arrangements on the island of Ireland to prevent a return to a hard border that inflamed sectarian differences in the past.

Raab welcomed Barnier’s suggestion that technology could be used to help resolve the issue after London said it could not accept the bloc’s proposal for Northern Ireland to effectively stay in the EU’s customs union.

He also said Britain was looking at how regulatory checks on some goods could be used as part of a solution to move Brexit talks, notably on a “backstop deal” for the Irish border, forward.

London has indicated that it may consider options on regulations on the island of Ireland, noting there are already some different rules for agriculture and food products between Northern Ireland and the rest of the United Kingdom.

But it was not clear whether the government would tolerate such a difference for manufactured goods.

“We said we would need to retain a UK-wide customs backstop and on the regulatory side of things, we have been clear that we will, as long as we can carry the communities of Northern Ireland with us, we will be open to looking at some of the options on regulatory checks,” Raab said on the sidelines of May’s Conservative Party annual conference.

The EU hopes a more developed promise of seeking close ties with Britain after Brexit could help May build a majority behind a divorce deal that the bloc insists must include an emergency fix for the Irish border.

    The bloc has decided to flesh out the declaration on post-Brexit ties with Britain a bit more to make the case for Britons more compelling.

Reporting by Gabriela Baczynska and Elizabeth Piper; Editing by Janet Lawrence

Our Standards:The Thomson Reuters Trust Principles.

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