(Bloomberg) -- Theresa May's inner circle of Brexit ministers did not agree a plan for resolving the Irish border question despite more than two hours of intense talks Wednesday, officials said.
The inconclusive result from the first of two key meetings narrows further the chances of finalizing the U.K.'s Brexit blueprint to satisfy the European Union's demand for more clarity on May's plans by the end of this week.
In a sign of the growing complexity of the negotiation, one senior member of the prime minister's team said the March deadline for agreeing the terms of a Brexit transition phase now looks optimistic, while Britain's final proposal for its future customs relationship with the bloc isn't close to being ready.
May's inner circle of top ministers -- nicknamed the “Brexit war cabinet” -- met for two and a half hours Wednesday with the aim of agreeing the U.K.'s goals for the future relationship it hopes to negotiate with the EU.
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The meeting focused on immigration and how to avoid a hard border with Ireland after the U.K. leaves the bloc. People familiar with the matter said the discussion was dominated by the thorny question of keeping a free-flowing Irish border when the U.K. leaves the EU's customs union, an issue that almost derailed Brexit negotiations in December.
The committee is split between those including Chancellor of the Exchequer Philip Hammond who want to stay close to the bloc, and Foreign Secretary Boris Johnson, who wants to break free from EU rules. Some Brexit-supporting ministers worry that the need to avoid a hard border on the island of Ireland could open the back door to keeping Britain inside parts of the EU's customs union.
Another meeting of the cabinet committee on Thursday is scheduled to consider the future trade terms the U.K. will try to agree with the EU.
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The European Commission says it's expecting an update from the U.K. on its intentions on Friday, although EU negotiator Michel Barnier gave a bit more leeway on Monday when he said he expects "an official U.K. position of the government in the next few weeks.” Talks on the outline future trading relationship are due to start in March.
Despite the imminent deadline, the British ministers almost certainly won't reach a final agreement on all the elements of the future relationship with the bloc at this week's meetings, the official said.
Customs Debate
Further talks are being lined up for next week and could even continue into the following week if necessary, said the person, speaking on condition of anonymity because the discussions are confidential.
Time is running out for May, who needs to set out her plan for Britain's future ties to the EU before European leaders sign off on their own priorities at a summit in Brussels next month.
“May is under enormous pressure to provide clarity about the end-state,” said Mujtaba Rahman managing director at Eurasia Group . "The procrastination has allowed the EU to dictate the agenda.”
Even when May's ministers do agree the broad outline for Britain's post-Brexit ties to the EU, they won't be close to finalizing the kind of customs arrangement that the government wants to have with Europe, the official said. That's because the two options under consideration -- a customs “partnership” or a “streamlined customs arrangement” -- require much more technical work before they can be properly assessed.
Transition Phase
Before the U.K. and the EU sit down to discuss the future trade and security partnership, they need to agree the terms of a transitional phase, the grace period designed to smooth the introduction of new rules after Brexit day in March 2019.
Negotiations on the transition period began this week. Until recently, it seemed likely that the U.K. would simply accept the EU's offer of a status quo deal, under which the current rules of its membership are simply extended.
But last week May signaled she planned to fight the EU over some of the conditions, and the U.K. raised objections Tuesday to seven aspects of the European Commission's position, according to another person familiar with the situation.
The government has repeatedly said it wants to pin down the transition arrangement by the end of the first quarter and is under growing pressure from business to do so. While the senior official said May's team still hoped for a deal on the transition at the March summit of EU leaders, some think it's growing less likely.
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To contact the reporter on this story: Tim Ross in London at tross54@bloomberg.net.
To contact the editors responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, Emma Ross-Thomas
©2018 Bloomberg L.P.
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