by Frank Schnittger
Thu Aug 19th, 2021 at 10:44:56 PM EST
For most of the summer British Ministers Brandon Lewis (N. Ireland Secretary) and Lord Frost (Brexit Minister) have been hyping up the risk of violence in Northern Ireland if the Northern Ireland protocol isn't radically re-negotiated. But strangely their dog whistles have fallen on deaf ears. So far, the marching season has passed by without major incident.
The fiasco of the election of Edwin Poots as DUP Leader and his replacement after a few weeks by Jeffrey Donaldson has kept the political focus firmly on the DUP. Even the dogs in the street know that Brexit in N. Ireland is largely the creation of the DUP and their erstwhile ally, Boris Johnson. So, who are the rioters supposed to be rioting against?
While refusing to renegotiate the deal, the EU has basically acquiesced to the British government's unilateral extension of the grace periods built into the agreement and so disruption of trade has to date been minimal. Most would be rioters have probably not noticed the absence of some fresh foods on Marks and Spencer shelves.
But with the grace period extensions due to run out in September, and Northern Ireland assembly elections due next May, the political temperature is about to be ramped up again. Support for the DUP has halved from the mid-thirties to 16% after the Brexit and Poots fiascos while support for the moderate unionist Alliance Party has doubled from 8 to 16% meaning it is vying with the DUP to be the largest unionist party in Northern Ireland.
This is of huge significance because it means there is likely to be a pro-protocol majority in the next legislative assembly with the Alliance (16%), Sinn Fein (c. 25% in the polls) and the SDLP (12%) all supporting the protocol, while the DUP (16%), UUP (14%) and TUV (11%) are opposed. The Assembly is due to vote on the continued operation of the protocol in 2024 and every 4 years thereafter (unless there is a majority in favour in both unionist and nationalist communities, in which case the next vote isn't for another 8 years).
The issue of whether the Ireland/Northern Ireland border remains open or subject to Single Market customs controls is therefore now explicitly part of the remit of the Northern Ireland Legislative assembly, which has heretofore had no role in foreign policy and no say on Brexit. Unionists naturally prefer to keep the border with Britain open arguing that that is where most of Northern Ireland's trade takes place, whereas nationalists and many unaligned voters value Northern Ireland's unique position of being in both the EU Single Market and the UK internal market.
Meanwhile, Brexit is having the expected effect on UK Ireland and north south trade within Ireland. Imports from Northern Ireland to the Republic have risen from €1.0 Billion to €1.8 Billion or 77 per cent in the first six months since the UK left the EU at the start of the year, while the value of exports from the Republic to the North has risen by 43 per cent. Exports from Ireland to Britain are up 20 per cent in the first six months to 6.7 billion, but imports have collapsed by 32 per cent to 5.3 billion.
Overall, Irish imports from Britain have declined from 20 per cent of total imports in the first half of 2019 to just 11 per cent now. The increase in the share of Irish imports coming from Northern Ireland , meanwhile, has increased from 2.6 per cent to 3.7 per cent over the same period. Thus, while trade between Northern Ireland and Ireland has increased dramatically, it hasn't made up for the fall in trade in Britain in cash terms.
Ireland was the one country in the world with which the UK had a substantial trade surplus, and that has been wiped out since Brexit. Some of the decrease in imports may be temporary while UK exporters get to grips with the new customs procedures, and Irish exports may take a hit next year when the UK, too, starts to implement customs controls on imports from the EU. But the overall trend is unmistakeable: The protocol is allowing trade within Ireland to thrive while trade with Britain declines.
No wonder unionists are concerned that the protocol presages the economic re-unification of Ireland. But canny members of the Northern Ireland business community also know that the €0.8 Billion boost to the Northern Ireland economy from increased exports to Ireland can only be good news for investment, jobs, and profits in the Northern Ireland economy. Critics have always derided unionists for being more loyal to the half crown (in old money) than the Crown. We shall see how this influences debate in the years to come.
I wouldn't expect the DUP's standing in the polls next May to be quite as bad as its opinion poll numbers in the wake of the Poots debacle. Some recovery under the leadership of Jeffrey Donaldson seems likely. With the UUP poll numbers under a new (and more moderate) leader, Doug Beattie, also improving slightly, there will be a real dogfight for the leadership of the unionist community.
It is important that the EU, in the interim, doesn't give oxygen to anti-protocol sentiment by taking a hard line on the ending of grace periods. Being for or against the protocol is becoming a proxy for being for or against a united Ireland which places the moderate unionist Alliance party in a difficult position. It supports the constitutional status quo but also values the opportunities the protocol gives Northern Ireland to act as a bridge between the UK internal and EU single markets.
Apparently, enquiries from companies seeking to set up in N. Ireland to service both the UK and EU markets are increasing significantly, which gives N. Ireland an opportunity to recoup some of the economic ground it has lost in recent decades through the closure of the shipbuilding, linen, and bus building industries. Why look a gift horse in the mouth, if I may switch from a canine to an equine metaphor?
This means that the Alliance Party is the key swing vote in determining whether the protocol is maintained in the long term. With N. Ireland one of the poorest regions of the UK, it makes sense for a pro-union party to seek to bolster the economic performance of N. Ireland as a way to demonstrate that being part of the UK can work to the benefit of all its citizens. So long as N. Ireland is seen as a failing economic state, the clamour for a united Ireland can only increase.
Conversely Sinn Fein, and its predecessor, the IRA, are often seen as trying to ensure that the Northern Ireland economy and polity cannot succeed, in order to force the debate on a united Ireland as the only viable alternative. Paradoxically, however, many southern Irish voters may baulk at the prospect of a united Ireland if it means massive subventions are required to support the N. Ireland economy. The net British exchequer subvention to N. Ireland is variously estimated at €10 to €13 Billion per annum, a figure that would very substantially reduce southern living standards if it became the responsibility of the Irish exchequer.
Sinn Fein argues that the need for much of this subvention would disappear in a united Ireland, as the cost of a large nuclear capable military industrial complex would no longer have to be borne by N. Ireland citizens, and as economic policies more suited to Northern needs would be pursued by an Irish government. If Ireland can succeed economically, why not N. Ireland with the same or better governance?
Nationalist sentiment is also often not driven by calculations of economic advantage, as Brexiteers know only too well. However the chances of a constitutional referendum on a united Ireland being passed in the south can only be improve if the perceived costs of re-unification are seen to have a prospect of reducing as time goes on. This requires that the N. Ireland economy recovers from its current backwater status, and being in the frontline between the EU and UK markets may be a good way to achieve that.
The EU could have another success story on its hands, ensuring peace, stability and economic prosperity for a region that didn't leave the EU ambit entirely and which may one day seek to rejoin by re-unifying with Ireland. So it is important for the EU to play a long game and not be provoked by the antics of Lord Frost et al whose real objective is not to help N. Ireland, but to advance English Brexiteer interest in a confrontational relationship with the EU. That and to create precedents for increasing British access to the Single Market without the costs of EU membership.
Brexiteers are still trying to have their cake and eat it, and if that means provoking violence in N. Ireland so be it. Who, in England, really cares?