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The Cabinet meets this morning.  Its members will wonder whether No Deal is now inevitable.  Perhaps the EU is now so set on carving up our country in any settlement that a collapse of the talks cannot be avoided.  But there is a potential escape route.

The EU’s support for the backstop is only one of many problems in the wider negotiation.  These cluster around the Prime Minister’s Chequers scheme, which was unequivocally rejected at Salzburg last month.  As the EU sees it, Chequers, with its core proposal to harmonise goods but not services with EU regulation, would breach the four freedoms of movement of goods, services capital, and workers; threaten the unity of its internal market, and potentially undercut EU27 businesses.

Were the backstop to be reduced to the only difficulty in the talks, it is possible to imagine that the EU would move to resolve it.

This is what would happen were Theresa May to take up a solution that the EU itself has offered – namely a Canada-style settlement.  Donald Tusk proposed it last spring.  “It should come as no surprise that the only remaining possible model is a free trade agreement,” he wrote.  “I hope that it will be ambitious and advanced – and we will do our best, as we did with other partners, such as Canada recently – but anyway it will only be a trade agreement.  I propose that we aim for a trade agreement covering all sectors and with zero tariffs on goods. Like other free trade agreements, it should address services.”

Were the Prime Minister to pursue such a settlement, the difficulties integral to Chequers from the EU’s point of view would fall away.  Our Government would not be proposing to breach the four freedoms and carve up the internal market.  As for competitiveness, any improvement in the UK’s position would in the EU’s view be offset by some friction in trade.

And, as we say, the sole negotiating obstacle of any significance would be the backstop.  Would the EU, by refusing to agree to a strict time limit on it or the right of the UK to end it, really pull down the pillars of the temple – and risk the hard border in Ireland that it wants to avoid?  Perhaps. None the less, the only escape lane that can now rescue the negotiation from a No Deal gridlock is now marked “Canada – this way”.

As David Owen suggested in his interview on this site last week, a practicable means of taking it might be, first, to allow the planned transition period to smooth the way and, next, to progress to a Norway-to-Canada stage while a free trade deal is negotiated.  This would be a take-it-or-leave it offer, with Customs Union membership ceasing before 2022, the planned date of the next election.

The Cabinet might be able to unite around this position today or post-Wednesday’s summit.  At at rate, no other position is on offer that could achieve this end – or which might both be acceptable to the EU and preserve the unity of the UK.

241 comments for: A Brexit alternative for the Cabinet today

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