New British proposal for Irish border 'step in right direction': EU source

BRUSSELS (Reuters) - European Union negotiators see the outline of a compromise on the Irish border issue which is holding up Brexit talks, EU sources told Reuters on Thursday, raising hopes that a new British offer could unlock a deal.

FILE PHOTO: Irish Defense Minister Leo Varadkar speaks at the Nelson Mandela Peace Summit during the 73rd United Nations General Assembly in New York, U.S., September 24, 2018. REUTERS/Lucas Jackson

Prime Minister Theresa May has promised new proposals and sketchy details seen so far have found a tentative welcome in Brussels.

“This is a step in the right direction,” said one EU source close to the negotiations. “It makes finding a compromise possible.”

A second source said EU negotiator Michel Barnier was looking at where the bloc could make improvements to what it has offered London as both sides race to overcome the remaining obstacles to a Brexit deal before a high-stakes EU summit on Oct. 17-18.

“We are definitely engaging with Britain” on ways to break the deadlock over what is known as the “Irish backstop”, said an EU diplomat following the negotiations.

Barnier himself said Brexit negotiations were in their final stages and the EU was working “hand-in-hand” with the Irish government.

“To agree to any deal, we need to have a legally sound backstop solution for Ireland and Northern Ireland,” Barnier said on Twitter after meeting Irish Prime Minister Leo Varadkar.

Britain has not yet formally delivered new its ideas, notably about a fall-back option to maintain the whole of the United Kingdom in a customs union with the EU.

The EU is insisting on a “backstop” clause in any withdrawal treaty to avoid erecting border posts between the British province of Northern Ireland and EU member Ireland if London and Brussels cannot agree a trade pact for the future.

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A seamless border is part of the settlement which largely ended decades of violence in the province.

Ireland’s Foreign Minister Simon Coveney said he was not aware that Britain had presented its new backstop proposal. But word that the EU was willing to engage with the new plan taking shape in London sent the pound rising against the dollar.

Varadkar met EU summit chair Donald Tusk before meeting Barnier.

Tusk urged May to put a round of angry rhetoric behind them and get down to sealing an agreement that would preserve peace in Ireland and open the way to a post-Brexit relationship he called “Canada plus plus plus” — combining free trade deal like the one agreed with Canada with close security, global affairs, research and other cooperation.

BORDER NUANCES

EU diplomats and officials described an emerging new proposal under which Britain would agree to an indefinite border backstop solution, a commitment missing in London’s previous proposal rejected by the remaining 27 EU states last June.

But Britain would stick to its line that, if the backstop was triggered, the whole of the United Kingdom would stay in a customs union with the EU. That would mean having the same external tariff on some goods, as the EU currently has with Turkey, and curb Britain’s ability to strike trade deals with other countries.

Under the British proposal described by EU sources, that would remove the need for customs checks on goods and agriculture on the island of Ireland.

The EU has feared such an arrangement could allow Britain to use Northern Ireland’s special access to the bloc’s single market to push goods that did not conform with high EU norms, and hence be sold cheaper.

For separate regulatory checks, Britain would agree to simplified, light controls on goods going from the British mainland to Northern Ireland that would be carried out away from the actual border as much as possible, according to EU sources describing the emerging proposal.

That is difficult for May, whose government relies on the support of the Northern Irish Democratic Unionist Party which vehemently opposes differing rules on its soil from the rest of the United Kingdom.

Additional reporting by Alastair Macdonald in Brussels and Padraic Halpin in Dublin; Editing by Janet Lawrence and Toby Chopra

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