UNITED KINGDOM – Brexit negotiations hit roadblock over Irish border issue

For background on the Irish issues involved in Brexit, read BAL’s white paper, “Brexit: What’s at Stake for Ireland.”

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IMPACT – MEDIUM

Brexit negotiations have broken down over the issue of Ireland and Northern Ireland, as U.K. Prime Minister Theresa May’s proposal has been rejected by the Democratic Unionist Party, the largest party in Northern Ireland. The DUP is staunchly in favor of Northern Ireland remaining part of the U.K. and currently supports May’s minority government.

In a leaked draft proposal, May proposed that Northern Ireland keep some form of “regulatory alignment” with European Union regulations and remain in the single market, essentially creating an exception to the U.K.’s withdrawal from the EU. The DUP, however, sees the proposal as treating Northern Ireland differently from the rest of the U.K. and a step toward Irish reunification, which it opposes.

"We have been very clear,” DUP leader Arlene Foster said. “Northern Ireland must leave the EU on the same terms as the rest of the United Kingdom. We will not accept any form of regulatory divergence which separates Northern Ireland economically or politically from the rest of the United Kingdom. The economic and constitutional integrity of the United Kingdom will not be compromised in any way.”

The breakdown of Brexit talks not only puts EU-U.K. trade talks on ice, but also weakens the fragile U.K. Conservative governing majority and could significantly complicate Brexit.

Ireland’s Prime Minister Leo Varadkar expressed surprise and disappointment at the last-minute failure of the EU-U.K. agreement that Ireland was ready to approve. He said that Brexit talks cannot move ahead without assurances from Britain that no hard border will be established between Ireland and Northern Ireland. “The ball is very much in London’s court,” he said. On Wednesday, according to press reports, the Irish government expressed its willingness to accept an additional provision within the EU-U.K. agreement stating that the agreement would not compromise the integrity of the U.K.

Those seeking a softer Brexit quickly seized on the moment to indicate that if Northern Ireland is exempted from Brexit, so too should others. Scotland’s First Minister Nicola Sturgeon said on Twitter that if one part of the U.K. can retain regulatory alignment with the EU and effectively stay in the single market, “there is surely no good practical reason why others can’t.”  London Mayor Sadiq Khan and Wales’ First Minister Carwyn Jones chimed in, saying that their regions would also seek to remain in the EU single market.

BAL Analysis: The collapse of the agreement on Ireland threatens to delay or derail Brexit talks. May and the DUP reportedly have until Sunday at the latest to reach an agreement with the EU on the Irish border issue. This would conclude phase I of Brexit negotiations and is necessary before they can move on to discussions about the U.K.’s future trade relations with the EU. BAL is following all Brexit developments and will report on any new developments. For background on the Irish issues involved in Brexit, read BAL’s white paper, “Brexit: What’s at Stake for Ireland.”

This alert has been provided by the BAL Global Practice group in the United Kingdom. For additional information, please contact uk@balglobal.com.

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