by Frank Schnittger
Wed Aug 16th, 2017 at 01:36:29 PM EST
The UK's Brexit secretary David Davis Photographer: Simon Dawson/Bloomberg
Leo Varadker's pre-emptive shot across the bows
appears to have had the desired effect of scaring the British off any notions of re-imposing border controls on the island of Ireland. However in forcing the UK to discard discredited notions of a frictionless tech border
he has done no more than inspire another bout of "having our cake and eating it" thinking on the part of the UK Government. Somehow the UK is going to leave the EU, Single Market and Custom's Union without imposing any sort of border controls within Ireland at all at all...
Clearly, the UK government wants to keep the Irish Government on side while also keeping the DUP sweet. The result is that it is effectively seeking to cast the EU in the role of the bad boy seeking to re-impose hard border controls within Ireland. Trusted trader status for Irish companies and exemptions for small cross border traders may seem like music to the ears of business and political leaders, North and south, but why should the rest of the EU tolerate it?
Britain rules out Irish Sea border but wants no customs posts in Ireland
The UK has explicitly ruled out any Brexit deal that would involve a border between Northern Ireland and the rest of the UK in a key position paper on its exit from the European Union.
In doing so, the UK's negotiating paper, published on Wednesday, again makes clear that the United Kingdom is not prepared to explore the possibility of treating Northern Ireland as a separate entity or for it to remain part of the customs union as some politicians North and South have urged.
"The UK has been clear that avoiding a return to a hard border between Northern Ireland and Ireland is one of our top priorities, but the answer on how to achieve this cannot be to impose a customs border between Northern Ireland and Great Britain and we believe our position on this is widely shared", the document says.
Confounding speculation that the UK would advocate CCTV cameras or number plate recognition systems as part of its vision for a frictionless Border between Northern Ireland and the Republic, the new position paper has effectively recommended no change to the current arrangements. It has also proposed a future customs arrangement which would see 80 per cent of businesses on the island entirely exempt from any new tariffs post-Brexit.
The exemption would apply to small and medium-sized enterprises involved in localised cross-border trade. In respect of larger companies engaged in international trade, the British government paper proposes they could adhere to any new customs regime by completing retrospective declarations either online or at their premises.
Officials concede that the proposals could be open to fraud -- with Great Britain or continental European-based companies using Irish business counterparts to avoid tariffs -- but they believe those risks can be managed effectively.
Undoubtedly, the EU Commission will be sympathetic to Ireland's concerns given that the Irish economy is the most exposed to the fall-out from a hard Brexit, and the consequences of a relapse into Northern Ireland's Troubled past occasioned by a hard border are too horrific to contemplate. The EU has also been flexible in agreeing anomalous arrangements where the size of the market concerned is not material in the context of the EU economy as a whole. The size of the N. Ireland economy (39.873 billion (PPP)) is less that 0.2% of the size of the EU economy. Is that small enough to be immaterial?
The big issue for the EU will be to prevent N. Ireland becoming a back channel for EU/UK trade and undeclared third country goods avoiding whatever tariffs, quality and customs controls come into force post Brexit. That will require, at a minimum, customs controls at Irish air and sea ports to establish whether Irish imports and exports are destined for the UK or originate from the UK or third countries.
That in turn will require a functioning "Certificate of Origin" system involving trusted economic operators providing the relevant documentation online and an audit and inspection regime capable of ensuring widespread compliance. Such a system is already in operation for third country trade, but would have to be expanded and upgraded substantially if UK/EU trade were to be included.
As both Ireland and the UK are outside the Schengen Area, existing immigration/passport controls would be sufficient to maintain both the Ireland UK Common Travel Area and our obligations to the EU/UK to control third party immigration. However what if EU citizens were to use Ireland as a back channel to enter the UK? Ireland can hardly be expected to implement immigration controls against EU citizens on behalf of the UK.
The bottom line is that if the UK wants to restrict EU immigration into the UK, it will have to implement some form of immigration controls with respect to travel from Ireland. That would be in breach of the Common Travel area unless implemented at (say) places of work in the UK and not as part of entry/exit procedures. No doubt the UK authorities have thought all of that through...
It is difficult to avoid the conclusion that the UK has deliberately adopted a negotiating position which blithely ignores many of the practical difficulties it will give rise to in the hope that the EU will cop the blame for insisting on controls which will prove extremely unpopular in Ireland. Instead of blaming Brexit, we are to re-direct our complaints to the Commission. Now where have we seen those tactics before?
However the UK government negotiating document will also fulfil another important purpose: it will keep the DUP off their back by maintaining the fiction that a "frictionless" border will be possible in Ireland post Brexit. Don't expect the UK government to change their stance until such time as the DUP's parliamentary support is no longer required. At that stage the DUP will be sold down the river like any ally who has outlived their usefulness. Perfidious Albion Rexit.