The Brexit transition period will need to be extended potentially for years because any new customs regime will not be ready to come into force in time, according to senior British officials, Bloomberg reports.
In what would be a politically explosive decision, the U.K. will have to stay inside the European customs union beyond the transition period’s end date of December 2020 while new border measures are developed, said two people familiar with the Brexit talks. It’s not government policy, but is being discussed by senior officials.
Prime Minister Theresa May is already under intense pressure over the future of Britain’s customs arrangements from rival factions within her divided Conservative Party, following a Cabinet split on Wednesday. Passionate Brexit campaigners such as Foreign Secretary Boris Johnson fear May will tie the U.K. too closely to the EU’s trade regime.
“Although May will try to somehow find a compromise that would keep the pro- and anti-EU factions of her party on board, that will be extremely difficult,” said Mujtaba Rahman, managing director at Eurasia Group. “Once again, her authority is on the wane.”
According to two people familiar with the matter, May and her divided cabinet now have two key decisions to make: first, what kind of customs deal they want with the European Union, and then what temporary measures will apply until the new system is operational.
The most obvious answer to the second question is to extend the U.K.’s transitional membership of the customs union beyond its current end date of the end of December 2020, the people said, speaking on condition of anonymity because the matter is sensitive.