Brussels - Theresa May failed to clinch a
deal on Monday to open talks on post-Brexit free trade with the
European Union after a tentative deal with Dublin to keep EU
rules in Northern Ireland angered her allies in Belfast.
The British prime minister had sat down to lunch with
European Commission President Jean-Claude Juncker hoping that a
last-minute offer to the Irish government of "regulatory
alignment" on both sides of a new UK-EU land border would remove
a last obstacle to the EU open talks next week on future trade.
Yet as May and Juncker spoke in Brussels and the pound rose
on prospects of free trade and perhaps even a very "soft Brexit"
for Britain as a whole, Northern Ireland's Democratic Unionist
Party (DUP) issued an uncompromising reiteration of its refusal
to accept any "divergence" from rules on the British mainland.
Irish Prime Minister Leo Varadkar cancelled a news
conference and the pound fell back, losing a cent against the
dollar, as May and Juncker emerged to declare that there was
still no "sufficient progress" on divorce terms to move ahead.
Varadkar later said he was surprised and disappointed with
May's U-turn after the British government had agreed a text with
the EU on Monday that would avoid any hard border which might
upset peace in the north after decades of violence.
He added that he was happy to give London more time but also
noted that the DUP, while the biggest party in the north, did
not have a majority in a province that voted against Brexit. He
said he was open to changing the wording of Monday's agreed
text, but only if its meaning remained the same.
The Irish border has emerged as a defining issue for Brexit.
Hardliners in May's government want to ensure Britain is not
bound by EU regulations after it leaves the bloc, but that has
proven difficult to reconcile with the 1998 Good Friday peace
agreement, which promises an unguarded border between
British-ruled Northern Ireland and the Irish Republic.
May and Juncker said they were confident remaining issues
could be resolved this week so that the other 27 EU leaders
would approve opening trade talks at a Dec. 15 summit. Juncker,
aware that a raft of concessions to EU demands risks weakening
May further at home, hailed May as a "tough negotiator".
May said: "We will reconvene before the end of the week and
I am also confident that we will conclude this positively."
But the Irish border issue has exposed fundamental dilemmas
in May's Brexit plans, and also underlined how a botched snap
election in June has weakened her hand in Europe and at home by
leaving her dependent for a majority on the DUP's votes.
The initial proposal described earlier on Monday by Irish
officials would have ensured that regulations in Northern
Ireland remained "aligned" with those in the EU, so that people
and goods could cross the border with no checks.
But that raised the question of whether Northern Ireland
would have special status, or whether all of the United Kingdom
would also be expected to comply with some EU rules. The leaders
of Scotland and Wales, and the mayor of London, swiftly
announced that if Northern Ireland were to gain special status,
they might want it too.
Juncker insisted the meeting was "not a failure". He added:
"Despite our best efforts and the significant progress we and
our teams have made over the past days on the remaining issues,
it was not possible to reach a complete agreement."
KEY PHRASE
Earlier, an Irish government source said of the accord: "The
key phrase is a clear commitment to maintaining regulatory
alignment in relation to the rules of the customs union and
internal market which are required to support the Good Friday
Agreement, the all-island economy and the border."
European Council President Donald Tusk, who met May after
she spoke to Juncker and who will chair next week's crunch
summit in Brussels, said that he had been ready to send draft
negotiating guidelines for a free trade pact to EU leaders on
Tuesday -- he cancelled a trip to the Middle East to do so.
"It is now getting very tight but agreement at December
(summit) is still possible," Tusk tweeted.
May has broadly agreed to many of the EU's divorce terms, EU
diplomats and officials have said. Those include paying out
something like 50 billion euros in a divorce settlement, a sum
which hardline Brexit supporters once dismissed as unacceptable.
May is under pressure, however, to cut a deal and offer
clarity on what will happen after Britain leaves in March 2019
as businesses take investment decisions in the new year.