John Simpson: Irish border may be harder than anyone would want
The Irish border poses difficult questions for Brexit. Will cross-border trade attract customs duties, and how will cross-border trade be measured? Then, the question becomes, 'Can the Irish land border be given special treatment after Brexit?'
On current evidence, subject to the final negotiations, cross-border trade could be subject to a range of different customs tariffs. Then there will be a search for methods to document cross-border trade. Paperwork declarations for commercial trade will be a requirement. If the Brexit negotiations lead to the re-introduction of customs duties between the UK and EU, then trade in goods across the Irish border would be affected.
The scale of customs tariffs and the administrative processes will define how hard the border will be.
The border may be significant for larger businesses. With the implementation of Brexit, the common travel area will remain. But will cross-border trade movements be supervised and how will any adverse impact on businesses be minimised? This will be difficult to deliver.
For goods shipped from/to Great Britain, Northern Ireland and Ireland, the best answer, which would leave trade arrangements untouched by customs charges, would be an arrangement for no customs duties on any of this trade. At best, a UK-EU trade deal would reinstate a single market and continue regulatory alignment.
If, as seems likely, the UK-EU final agreement falls short of a full duty-free arrangement, then the serious question is, how can the impact of the UK-Ireland border be minimised?
Getting the second best answer of no hard border must be seen from the three differing perspectives of each administration in the UK, Northern Ireland and Ireland. A constraint on the possible options is that the position of the Irish Government will radically differ to that of the UK.
The Government, acting either for the whole of the UK or with devolved arrangements for Northern Ireland, would be able to regulate any customs duties for either all of the UK or, unusually, only for defined areas of trade involving Northern Ireland.
If, as a method of facilitating trade to/from the UK, the UK agreed that there should be no customs duties on goods from Ireland that would be, for the Irish, a national UK decision. For Ireland, as a member of the EU, there would be problems in an offer of duty-free trade on goods from the UK, or just from Northern Ireland, because that would also give indirect access to all 27 EU countries. The European Commission might oppose this suggestion.
But could arrangement be designed for cross-border trade by SME businesses to continue by specifically removing any customs duty charges on intra-island trade? In scale, this is akin to a de minimis clause which helps small-scale local trade. In effect, this exemption would mean that only cross-border trade conducted by larger firms would face customs duties. It would fall short of the declared political aspiration to eliminate the border.
The other major cross-border question is whether and how the border formalities can be simplified without creating a 'stop and check' administration. Subject to occasional random physical checks, the Government seems ready to approve a system of fairly unrestricted 'authorised economic operators' and e-mail document delivery. These methods of customs clearance using modern technology have the potential to ease the operation of the Irish border for both governments. However, time is short and final proposals are awaited.
With regret, at best - without a new UK-EU free trade agreement - a formal UK-Ireland trade border will be needed. By unavoidable consequence, this could hurt Northern Ireland as a place to do business.