May pressured as EU says post-Brexit trade deal won’t look like Chequers

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Pressure is mounting on Theresa May tonight as the EU insisted a future trade deal will not look like her Chequers plan – and the DUP warned her against making ‘catastrophic’ concessions on the Irish border. 

Diplomats in Brussels have said they are ‘very close’ to agreeing a divorce package after months of bitter wrangling over the Irish border.

But chief negotiator Michel Barnier is expected to make clear he is playing hardball by publishing a draft ‘declaration’ on post-Brexit trade arrangements that falls far short of her blueprint. 

The move seems designed to impose maximum strain on the PM as she prepares to table revamped proposals for a ‘backstop’ to prevent a hard border between Northern Ireland and the Republic.

There are expected to be concessions on how regulations can be enforced – although Mrs May will hold the line that the province cannot be split from the rest of the UK’s customs jurisdiction.

However, doubts over whether Mrs May will be able to win approval for her new plan at home were fuelled today as the DUP’s Westminster leader Nigel Dodds repeated warnings that it will not tolerate ‘tariffs, checks or anything else between one part of the UK and the other’.

He said anything that gave Northern Ireland special status would be an ‘economic catastrophe’ – and said any backstop must be ‘time limited’. 

The tough message came after DUP leader Arlene Foster said she had ‘blood red’ lines on the issue – suggesting she is ready withdraw the support of her 10 MPs who are propping up the Tory government.   

Meanwhile, it was claimed tonight that EU leaders will release a first draft of the political declaration next week.

The declaration – which is fewer than 10 pages long and will accompany the withdrawal agreement – is expected to include an “evolution clause” saying Brussels could improve its offer if the UK shifts its red lines during the transition period.

But the document is likely to make life more difficult for Mrs May as it merely proposes a Canada-style deal, rather than deeper ties along the lines of her Chequers plan.

There will be a commitment to no tariffs or quotas, but also demands for ‘level playing field’ conditions intended to avoid the UK getting a competitive advantage in areas like regulatory standards and state aid, , reporters in Brussels have been told. 

The relatively limited plan will be embarrassing for the PM, who has stuck to insisting her Chequers model is the best option. 

It also makes the Irish backstop even more critical, as it undermines the argument that border issues can be eased by a deep partnership between the wider UK and EU. 

After talks with EU council chief Donald Tusk last night, Irish PM Leo Varadkar said there was a ‘good opportunity’ to seal an agreement by a crucial summit later this month.

And officials told reporters in the Belgian capital that a settlement of the first phase of talks was ‘very close’. 

Mr Varadkar said it could take longer than the current mooted 20-month Brexit transition period to agree final trade arrangements.

 ‘What I do know is that we need a backstop, a protocol on Ireland and Northern Ireland as part of a withdrawal agreement,’ he said.

‘I think we are entering a critical and decisive stage of these negotiations and there is a good opportunity to clinch a deal over the next couple of weeks.’ 

Mr Tusk stirred tensions last night by repeating his offer of a simple, Canada-style free trade deal.

He said the EU’s proposal for an enhanced version of the free trade deal it negotiated with Canada – sometimes referred to as ‘Canada+++’ – was still on the table.

The intervention seemed designed to cause trouble for Mrs May – who has been fighting off demands from Tory Brexiteers to pursue such a package.

However, the EU says a Canada-style deal can only happen if Northern Ireland stays in its customs jurisdiction. Mrs May has insisted no UK Prime Minister could ever agree to such terms.  

Mr Tusk said: ‘Let me make this clear: the EU wants a relationship with the UK that is as close and special as possible.

‘From the very beginning, the EU offer has been not just a Canada deal, but a Canada+++ deal.

‘Much further-reaching on trade, on internal security and on foreign policy cooperation. This is a true measure of respect.

‘And this offer remains in place. The EU is serious about getting the best possible deal. Even though we haven’t changed our minds that the consequences of Brexit will be negative, for both sides.’

Former Brexit secretary David Davis, who quit over Chequers, said: ‘This shows clearly that No 10’s claim that ‘there is no alternative to Chequers’ is just wrong.

‘We could easily switch strategies to Canada+++ and deliver an outcome that is good for the UK, acceptable to Parliament, and negotiable with Brussels.’

Mrs May’s new backstop proposals are thought to involve the whole UK matching customs union rules for a period after Brexit.

Mrs May appears set to promise Brexiteers the agreement would be replaced in time by a comprehensive trade deal but is needed to avoid a hard Irish border until then.

But Mr Dodds told BBC Radio 4’s Today: ‘It’s important … that there are no economic barriers put up, tariffs, checks or anything else between one part of the United Kingdom and the other.’

He said any backstop ‘has to be temporary as (Brexit Secretary) Dominic Rabb has already said, it needs to be time-limited.

‘It needs to be clearly linked to whatever the future relationship is. Whatever about the particular arrangements UK wide, what it consists of and all the rest of it, the real danger is this is something that could be hanging over the UK and Northern Ireland for many many years, a legally binding international agreement before we actually know what is in the future trading relationship.

‘This was always the major problem with the agreement by the government back in December to agree a backstop.’

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