UK Proposals for Irish Border Would Keep Britain in EU Customs Union After Brexit

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LONDON—The U.K. government published long-awaited proposals to solve the problem of the Irish border after Brexit, although officials in Dublin and Brussels signaled they still don’t go far enough to address their concerns.

The British plan effectively commits the U.K. to remain part of the European Union’s customs union long after it formally exits the bloc.

The customs union establishes tariff-free trade among members of the EU and sets common tariffs on goods entering from nonmember countries. Britain is a member but has pledged to leave to pursue its own trade deals around the world.

Under the proposals unveiled on Thursday, the U.K. wouldn’t leave the customs union until permanent arrangements can be put in place, possibly involving new technologies, that avoid the emergence of a visible border between Northern Ireland and the Republic of Ireland. Northern Ireland is part of the U.K. while Ireland will remain in the EU.

The six-page technical note sketching the outlines of a temporary customs arrangement follows weeks of wrangling among factions of Prime Minister Theresa May’s government over the type of Brexit the U.K. should pursue.

It received a cautious welcome from Michel Barnier, the EU’s chief Brexit negotiator, and Simon Coveney, Ireland’s deputy prime minister. Yet both officials said more clarity is needed to reach a final agreement, particularly around noncustoms aspects of the British-EU relationship, such as product regulation.

“Clearly, a lot of work remains to be done,” Mr. Coveney said.

The U.K. is due to exit the EU in March, though negotiators from London and Brussels have provisionally agreed on a 21-month transition period through December 2020 to iron out final details and smooth withdrawal for businesses. During this time, Britain would trade as part of the EU’s single market and customs union.

Both sides have also agreed that Brexit shouldn’t lead to customs checks or other infrastructure creating a hard Irish border.

The EU has demanded a so-called backstop as part of the withdrawal agreement with the U.K. to make sure no border emerges. The worry is that visible infrastructure at the border could unsettle the fragile peace accord that brought an end to decades of bloody violence in Northern Ireland in 1998.

London’s proposals were pitched as the customs element of that backstop. The U.K. proposed that, absent an agreement on a new economic relationship, it would enter a customs arrangement with the EU that mirrors most aspects of the EU’s existing customs union, while giving London the freedom to sign its own trade deals. That would eliminate the need for customs checks on the Irish border, according to the British plan.

The document said any such arrangement would be temporary—a key demand of the Brexit hard-liners in Mrs. May’s government, who are loath to commit the U.K. to any open-ended deal that preserves ties with the EU.

Yet it was vague on how a time limit would work in practice, saying only that officials expect to be able to implement a new permanent arrangement with the EU—and therefore be able to exit from the customs union—before the end of 2021. Trade experts however regard that as a very tight timetable to implement new customs arrangements to avoid a visible border.

“There are a range of options for how a time limit could be delivered, which the U.K. will propose and discuss with the EU,” the document said.

The wording is “another messy fudge,” said Mujtaba Rahman, managing director for Europe at consultancy Eurasia Group. “And, of course, the EU won’t like it.”

Among the questions European officials explored on Thursday was how Britain would cope with any changes in EU rules and standards after the Brexit transition period ends in 2020.

There were uncertainties, too, about how the proposal would be enforced and whether Britain would continue to abide during the period by EU antifraud or antidumping rulings. Officials also asked whether the 2021 date included in Britain’s proposal represented an aspiration or a firm limit.

London’s proposal on the customs backstop comes ahead of critical votes on the government’s Brexit strategy in Parliament on Tuesday.

Mrs. May lacks an overall majority in the House of Commons, and may be forced into accepting closer EU ties from lawmakers unhappy about her push for a clear break.

Write to Jason Douglas at jason.douglas@wsj.com

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