May's Northern Irish Ally Drops Hint on How Brexit Puzzle Can Be Fixed

(Bloomberg) -- A solution to the biggest hurdle in Brexit talks may be starting to emerge.

U.K. officials have been working privately on an idea to solve the question of how to keep the Irish border open after Brexit. It's potentially controversial, because it involves some barriers between Northern Ireland and mainland Britain. But a member of the Northern Irish party that props up May's government just hinted that the plan could be acceptable.

Divorce talks have stalled because the European Union and the U.K. can't agree on the wording of a guarantee that aims to avoid a hard border between Northern Ireland and the Republic of Ireland after Brexit.

The EU has proposed keeping Northern Ireland within its customs and rules area -- something Prime Minister Theresa May and the Democratic Unionist Party that backs her have rejected because it would sever the province from the rest of Britain.

The U.K. is now coming up with its own counter-proposal. It hasn't announced it yet but officials say privately that it could involve keeping Northern Ireland aligned with EU regulations, and therefore putting a regulatory border -- but not a customs border or the introduction of any tariffs -- between Northern Ireland and Britain.

Read more: U.K. Is Said to Weigh Contentious Brexit Plan for Irish Border

Speaking on Thursday, DUP lawmaker Jeffrey Donaldson said that what the party objects to is a “customs border” between Northern Ireland and the British mainland. U.K. officials including May also use that term when setting out their red lines.

“We are very clear that any attempt to separate Northern Ireland out from the rest of the U.K. by creating a customs border in the Irish Sea would of course be unacceptable,” he told RTE Radio in an interview. “We do not want tariffs on goods between Northern Ireland and Great Britain.”

The plan being floated by U.K. officials would be compatible with those demands.

Officials on both sides point out there are already some differences in rules and laws between Northern Ireland and mainland Britain, and regulatory checks already exist between the two for animal imports.

EU chief negotiator Michel Barnier has said he is open to new ideas on how to ensure the Irish border stays open. And the U.K. has already said that it's prepared to keep the whole U.K. in the EU's customs area as a last resort to avoid a hard border. That's why there wouldn't need to be a customs border between the Northern Ireland and Britain.

Talks are set to resume in late August.

To contact the reporters on this story: Emma Ross-Thomas in London at erossthomas@bloomberg.net;Peter Flanagan in Dublin at pflanagan23@bloomberg.net

To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Emma Ross-Thomas, Stuart Biggs

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