The whole of the UK could remain in the customs union for a time after transition in order to prevent a hard border in Ireland
Both the UK and the EU are determined to avoid a hard border – physical infrastructure, officials, checks – between Northern Ireland and the republic after Brexit. The government believes the key to doing this is a comprehensive free trade and customs agreement, but the EU fears Theresa May’s red lines of leaving the single market, customs union and ECJ jurisdiction make such a deal unlikely. It also thinks there is no time to conclude such a complex an unprecedented agreement – which, if doable at all, could take many years – before the transition period ends in December 2020. The government has proposed two customs solutions: a partnership, under which Britain would collect import duties on the EU’s behalf, and a high-tech “max-fac” alternative, but the EU has rejected both as unworkable. So Brussels has insisted the UK sign up to a legally binding “backstop” clause, or fallback option, to ensure there is no hard border.