Key part of May’s Brexit plan meets resistance in Brussels

Theresa May’s vision for Brexit has received its first serious knockback from Brussels as MEPs objected to her plan for maintaining frictionless trade.

The prime minister’s detailed proposals for post-Brexit relations have largely been welcomed as the basis for progress in negotiations.

Green MEP Philippe Lamberts told Yahoo: “It’s as if the adults in the Tory room have come to terms with reality. That’s significant progress so we should encourage it.”

EU leaders are keen not to destabilise May to the benefit of hard Brexit supporters and being careful that they’re seen to give her proposals proper consideration.

The European Parliament’s Brexit steering group, which is led by Guy Verhofstadt, gave an uncharacteristically positive reaction to the proposals.

The group said May’s vision would “place the future EU-UK relationship in all its dimensions – economic, sectoral, security, foreign policy – on a firm footing within a coherent governance structure.”

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But they also hinted that central parts of the plan will be rejected on the EU side.

Their statement pointedly reiterated support for “principles of the non-divisibility of the four freedoms, the integrity of the single market, avoiding a sector-by-sector approach.”

That could be read as a rejection of proposals in the White Paper for the UK to effectively remain in a customs union for goods without accepting freedom of movement.

The group’s statement also states: “In this framework there will be no space for outsourcing EU‘s customs competences.”

That relates to the UK’s plan for a “combined customs territory” with the EU.

The complex solution to avoiding custom checks with the EU – and therefor avoiding a hard border in Ireland – would ensure goods entering the EU via the UK are compliant with EU rules and duties, while allowing the UK to operate its own regime.

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An EU official told ITV political editor that the proposal is “nuts.”

Lamberts, a member of the Brexit steering group, put it more diplomatically: “That will need to evolve significantly from where it is today.”

But he did offer some hope to May when it came to securing a special deal on trade in goods.

“Of course we don’t want to split the single market but then again, when you look at what free trade agreements do, they do split the market. For instance, when we had the CETA deal with Canada, it had no financial services. So, yes, we are splitting.”

EU chief Brexit negotiator Michel Barnier has said he will analyse the paper before discussing the proposals with new Brexit Secretary Dominic Raab on Monday.