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BrexitCentral: The Republic of Ireland should see the Brexit negotiations as an opportunity not a threat

Date: 30 11 2017

The Republic of Ireland should see the Brexit negotiations as an opportunity not a threat

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Since publishing its position paper on the issue in August, the UK Government has been unequivocal that it has no desire to impose a “hard border” between the Republic of Ireland and Northern Ireland; it will maintain both the Common Travel Area and the Belfast Agreement. The paper stated that the UK and Irish governments were “wholly aligned” in those objectives yet, in recent days, various Irish representatives have been anything but.

The proposal now being touted by some of an internal UK border in the Irish Sea – with Northern Ireland remaining part of the Customs Union – serves no one’s best interests. Northern Ireland does 87 per cent of its trade with the UK – 66 per cent in the Province and 21 per cent with Britain. Just five per cent of its trade is with Ireland and a mere three per cent with the rest of the EU. It would be absurd for Northern Ireland to be cut off from the UK Single Market for the sake of that eight per cent, just as it would be for Great Britain to enjoy the opportunities of global free trade outside the Customs Union without having the Northern Irish economy do the same. The integrity of the United Kingdom is, as Nigel Dodds correctly puts it, “non-negotiable.”

The suggestion should not be any more appealing from the Irish perspective. We are key trading partners, with the UK receiving 13.9 per cent of Ireland’s exports and providing over a quarter of her imports. Crucially, only 1.6 per cent of Irish imports and exports run between the Republic and Northern Ireland; the overwhelming share of trade is between the Republic and Great Britain. Once again, the Republic’s trade with Northern Ireland is a very small part of the much more significant trade with the whole of the UK.

It helps to remember that there is already a border between the two countries in currency, VAT and excise duties. The UK and Irish governments can currently perform inspections for immigration violations, fraud, smuggling and so on. We would not, therefore, be imposing a border where previously there was none, and this offers a sense of perspective. At present for all imports from outside the Customs Union, UK border authorities physically inspect only four per cent of consignments and the Irish authorities only one per cent. There is no reason why this figure should not be much lower (or even reduced to close to zero) with checks carried out away from the border at business premises.

I have now been visiting Northern Ireland very regularly for a decade, first as shadow secretary of state, then Secretary of State and now privately. I have spoken to numerous businesses and politicians on both sides of the border; in 10 years, not one person has ever told me that it presents any problems to their trade.

Irish politicians’ efforts would, therefore, be better devoted to pressing the European Commission for a comprehensive EU-UK free trade agreement as the best means of securing continued, frictionless trade with us. Our two countries are – and must remain – close and supportive partners. I was deeply involved in our discussions to help the Republic of Ireland in her moment of need in 2010. We had no hesitation in providing some £7 billion for the bailout in 2010 (including the £3.25 billion provided by the Loans to Ireland Act which passed through Parliament virtually unopposed). At the same time, against the wishes of France and Germany, we were staunch defenders of Ireland’s right to set a low rate of Corporation Tax. Irish politicians would do well to remember that and worry less about the forthcoming presidential election in November next year.

UK and Irish representatives should instead see these negotiations as an opportunity. They are a chance to build an innovative, pragmatic and technologically advanced system away from the outmoded dogma of the Customs Union. In particular, we should improve and expand our Authorised Economic Operator scheme allowing customs clearance for operators undertaking routine, repeat business across the border. As an example, milk crosses daily from the same suppliers to the same customers in the same tankers. They would be able to submit their paperwork electronically ahead of travel, with number-plate recognition systems allowing trucks to cross the border without so much as changing gear. Small traders, too, can be afforded some special status or exemptions, with light-touch regulation and the requirement to pay any duties only once or twice each year to minimise their disruption.

Even in the absence of such a deal, however, there is no need for a return of physical infrastructure at the border. The prospect of uniformed border officials, watchtowers and long queues is wholly fanciful.

In reality, the notion of a “hard border”, at which all incoming goods are checked, has been obsolete for decades. Such thinking sits at the foundation of the Customs Union — replacing internal borders with rigid external barriers — but was outdated even before the Treaty of Rome. The United Nations Economic Commission for Europe established the successful Transports Internationaux Routiers (TIR) scheme in 1949 with a view to ending cross-border checks for goods in transit.

This system has brought about the TIR Convention, to which there are 71 contracting parties, including the EU. At its centre is a document — the TIR carnet — which is issued to registered transport operators for each journey and lists the details of its cargo. Licensed vehicles are given free passage across borders, with any tariffs or other taxes becoming payable only when the final destination is reached.

Over three million carnets are now issued every year, accounting for 10,000 trucks and 50,000 border crossings every day. The model is constantly improving; from 2003 it has been undergoing computerisation as the e-TIR system and is emerging now as a fully electronic, paperless system. Across the world, the handling of goods in transit is adopting this approach.

Border checks and customs posts are being consigned to history. Transit times are being speeded up with modern technology. It would be little short of bizarre for the EU to go against this global trend and — especially given the economic and political incentives — certainly not something which the Irish Government should tolerate.

The UK does not wish to see a hard border imposed; the Irish government must be firm in telling the European Commission that nor do they. The surest path to achieving that is with a comprehensive EU-UK reciprocal free trade deal with zero tariffs; I hope that the Taoiseach will argue very strongly for one. But, deal or no deal, a sensibly-managed system of trusted-trader programmes and advanced electronic border technology can ensure continued, productive North-South and East-West co-operation. Like the successful Common Travel Area, the new arrangements can be a unique, British Isles solution, in the best interests of all our citizens.

November 29th, 2017: BrexitCentral