by Frank Schnittger
Fri Dec 17th, 2021 at 05:19:42 PM EST
The weird and wonderful ways of British diplomacy were again on display with the unexpected, unrequested, and unexplained decision by the British government to waive all checks on goods arriving from the island of Ireland "until further notice". Exports from Ireland to Britain have been booming (+20%) compared to last year, with imports from Britain slumping by 32%.
Some believe the decision is because UK customs systems are simply not ready to process this level of exports. Another theory is that the Johnson government is concerned import controls might add to the shortages of food and other goods being faced by British consumers. The UK imports almost half the food it consumes with 26% of its total food consumption coming from the EU. More food shortages would not be a good look for the Johnson government.
What's behind British move not to impose Brexit checks on goods from Ireland?
An announcement by Britain's Brexit minister David Frost this week that his country would waive all checks on goods arriving from the island of Ireland "until further notice" has baffled officials in Dublin and Brussels.
It has raised once again an eternal question about the government of Prime Minister Boris Johnson: do its acts reflect incompetence or is it all a grand plan?
Frost announced the measure as a "pragmatic act of goodwill can help to maintain space for continued negotiations on the Protocol".
It was presented as a kind of olive branch as negotiations continue between UK and EU officials on how to tweak Northern Ireland post-Brexit arrangements to remove friction.
But the step was not something that had been sought by either the EU or Dublin. On the contrary, the Irish government had been spending significant money and effort on an information campaign to tell its exporters to Britain to get ready and prepare for the impending checks. To Dublin, it came as a puzzling surprise.
It was one thing for Britain to announce such a thing for Northern Ireland, but extending it to the entire island of Ireland was peculiar.
It means that the Republic's exporters to Britain have an advantage compared to their domestic UK counterparts sending produce the other way, who are subject to full checks at Dublin port.
Other EU exporters to Britain who deliver their produce through connections to the continent, like Calais, will also have the same comparative disadvantage compared to those in the Republic.
The theory in circulation is that British customs were simply not prepared to handle the level of incoming Irish agricultural goods.
Officials from EU countries who have been co-ordinating with their British counterparts on customs have the impression that customs preparations in the UK are still drastically behind the level needed for the post-Brexit reality.
Whisper it, but under the most-favoured-nation principle, "countries cannot normally discriminate between their trading partners".
"Grant someone a special favour (such as a lower customs duty rate for one of their products)," the WTO explains. "And you have to do the same for all other WTO members."
WTO treaty? What Treaty? The UK is only planning to break it in a very targeted and specific way...
Another way of looking at this decision is to consider that the British government has privately come to the view that leaving the Customs Union and Single Market (CUSM) has been a disaster and hasn't yielded the "have cake and eat it" benefits expected by leading Brexiteers. Not only has the USA not engaged in meaningful negotiations on a trade deal, but it has retained Trump era tariffs on UK steel and aluminium exports it has now waived for EU exports. Apart from the fact that they were essentially copy and paste jobs of the trade deals the UK had with those markets as part of the EU, what "new" trade deals the UK has negotiated since Brexit have been tiny in terms of overall UK trade, and economically insignificant.
Perhaps the UK is now trying to find a way out of this mess of its own making by creating a precedent of no import controls with Ireland in the hope this can later be extended to the EU as a whole on condition of reciprocity. The EU would then have to recognise the UK's standards as equivalent to its own and allow unfettered trade providing the UK with a backdoor into the CUSM without having to admit it made mistake in leaving.
I can't see the EU falling for that one, under the Johnson regime in any case, but first the UK would have to create some good will and a more cooperative climate. Easing off on the Protocol rhetoric, dropping the insistence that ECJ oversight must go, and giving some preferential treatment to Ireland would then become part of a divide and conquer strategy whereby the UK could say to the EU - look, look, you too could be like Ireland with unfettered access to the UK market! I am not privy to the views of EU governments on this prospect, but I suspect they are just fine with current arrangements, whereby UK companies are losing market share within the EU on an ongoing basis.
Wasn't one of the favourite Brexiteer slogans "They need us more than we need them"? That one may return to bite them...