Britain is set to sign an 'open skies' deal with the US to keep planes flying between the two countries after Brexit

  • Britain must sign new open skies deal to stop flights being grounded after Brexit
  • Negotiators say they hope a deal can be announced before Brexit day in March
  • Would be boost for TheresaMay whose Cabinet is divided over customs plans

Britain is set to agree an 'open skies' agreement with the US to keep planes flying between the two countries after Brexit .

There had been warnings that flights could be grounded unless a deal is swiftly done after the UK quits the EU.

But in a boost for Theresa May , American and Britain are on the cusp of signing a deal to keep flights running, it has been reported.

And under proposals being thrashed out between the two countries, the open skies deal would be extended to UK overseas territories for the first time.

Negotiatorshave agreed that major transatlantic airlines that are foreign owned must also be covered by the deal in a break with the normal rules, The Daily Telegraph reported.

The US and Britain believe the deal can be unveiled before Brexit comes into force in March next year, although it ay be implemented later.

The deal would be a major boost for Mrs May, who is struggling to get her deeply divided Cabinet to sign up to her Brexit vision.

Open skies agreements allow airlines to set the prices for flights in and out of countries rather than governments.

The UK will fall out of the EU-US open skies deal the day after Brexit - prompting warnings from some that flights could be grounded.Britain also needs to negotiate a separate deal with the EU to ensure flights carry on as normal after Brexit.

This is particularly important as many Americans who fly into the UK go on to travel to the continent afterwards.

Sean Kennedy is the senior vice president of global government affairs at Airlines For America – a trade association which represents the country's largest airlines and has contributed to talks.

He told the newspaper: 'Seamless air travel between the U.S. and the UK needs to be a Brexit priority.

'There has been ongoing engagement between both governments to come to a quick resolution, and we are confident that a deal is within reach.'

It comes as Mrs May's Cabinet remains locked in a bitter row over Brexit and the future customs relationship the UK should have with the EU.

The PM had backed a new customs partnership with Brussels which would see the UK collect import tariffs on behalf of the bloc.

But leading Brexiteers have poured scorn on the plan fearing that it would effectively stop the UK from striking trade deals around the world and the UK varying its tariff rates.

Boris Johnson publicly branded the proposal 'crazy' and has called for a clean break with Brussels.

Instead they back the maximum facilitation option - dubbed max fac - which would see the UK use technology and a new 'trusted trader' designation for businessesto facilitate free trade and avoid a hard Irish border.

What are the two proposals for the UK's post Brexit customs plans

OPTION 1 - CUSTOMS PARTNERSHIP

Under the so-called 'hybrid model', the UK would collect EU import tariffs on behalf of Brussels.

Britain would be responsible for tracking the origin and final destination of goods coming into the country from outside the EU. The government would also have to ensure all products meet the bloc's standards.

Firms selling directly into the UK market would pay the tariff levels set by Brussels - but would then get a rebate if Britain's tariffs are lower.

Supporters of the hybrid plan in Cabinet - including Theresa May, Philip Hammond and Greg Clark - say keeping duties aligned up front would avoid the need for physical customs borders between the UK and EU.

As a result it could solve the thorny issue over creating a hard border between Northern Ireland and the Republic.

Mrs May has been advised by the chief whip that the hybrid option could be the only way of securing a majority in parliament for a Brexit deal.

But Brexiteers regard the proposal as unworkable and cumbersome - and they were joined by Sajid Javid and Gavin Williamson in criticising it at a tense 'War Cabinet' meeting last week.

There are fears the experimental system will either collapse and cause chaos, or prevent the UK from being able to negotiate free trade deals around the world after Brexit.

Mrs May has instructed official to go away and revise the ideas. Eurosceptics are braced for her to bring back the plan with only 'cosmetic' changes, and try to 'peel off' Mr Javid and Mr Williamson from the core group of Brexiteers.

They are also ready for Mrs May to attempt to bypass the 'War Cabinet' altogether and put the issue before the whole Cabinet - where she has more allies.

OPTION 2 - MAXIMUM FACILITATION

The 'Max Fac' option accepts that there will be greater friction at Britain's borders with the EU.

But it would aim to minimise the issues using technology and mutual recognition.

Goods could be electronically tracked and pre-cleared by tax authorities on each side.

Shipping firms could also be given 'trusted trader' status so they can move goods freely, and only pay tariffs when they are delivered to the destination country.

Companies would also be trusted to ensure they were meeting the relevant UK and EU standards on products.

Senior ministers such as Boris Johnson, Michael Gove and Liam Fox believe this is the only workable option.

But Remain minded Tories such as Mr Clark insist it will harm trade and cost jobs in the UK.

They also warn that it will require more physical infrastructure on the Irish border - potentially breaching the Good Friday Agreement. It is far from clear whether the government would be able to force anything through parliament that implied a hard border between Northern Ireland and the Republic.

The EU has dismissed the idea that 'Max Fac' could prevent checks on the Irish border as 'magical thinking'.

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