EU officials negotiating the withdrawal agreement have warned their British colleagues that their draft will keep Northern Ireland in the customs union and single market after Brexit. As the Guardian has reported, the legal text of December's Brexit divorce agreement, which is to be published in around 2 weeks, could contain a special "sunset clause" on the issue.
Brussels expects the UK to agree on it. The text falls in line with the Good Friday agreement between London and Belfast and could also help to overcome potential losses of the north-south economy. Such a move should help to avoid harder borders between the Republic of Ireland and Northern Ireland, which impact the trade between the neighboring countries.
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The agreement is likely to face strong opposition in the Conservative Party as well as the Democratic Unionist party, who have taken a strong stand against any move in the Brexit process which separates Northern Ireland economically or politically from the rest of the United Kingdom. According to them, it compromises the integrity of the country.
Their 10 MPs at the House of Commons provide crucial support for the Prime Minister Theresa May in terms of budget and Brexit legislation. This puts the country's government in a difficult position, who have to reach a consensus on the question of the Irish border.
There are some skeptical voices in the EU, too. The French diplomats, cited by the Financial Times, claimed, the single market would be compromised as Northern Ireland could become a backdoor for goods failing to comply with the EU standards. It could also give the local traders preferences.
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However, the scenario with Northern Ireland staying under EU jurisdiction is backed by some groups in the republic. A local major party with nationalist base Sinn Fein calls for special status for Belfast after the transition period, which lasts nearly 2 years.
The authorities in Northern Ireland also voice concern about potential threat to peace. George Hamilton, chief constable of the Police Service of Northern Ireland, has reportedly warned that border infrastructure would become a target for armed groups.
The stakes are high in the economic field, too. As the governmental study "EU Exit Analysis — Cross Whitehall Briefing", leaked last week, shows Northern Ireland could face a GDP slump of 12% if Britain leaves the EU without a deal. A free trade agreement will leave Belfast with an 8% fall. UK remaining in the EU's single market via the European Economic Area secures just a 2.5% drop.