Belfast Telegraph

John Simpson: Seven months to go and still few firm answers on Brexit

 

By John Simpson

There are many questions for which agreed answers are needed when it comes to preparing for Brexit in Northern Ireland, but sadly, with just over seven months to go, there are few firm answers.

Either there will be an intensely complex debate through the coming winter or, as now seems more likely, an ill-prepared muddle surrounded by business and political uncertainty, as the exit date from the EU comes closer.

How close are the UK-EU negotiations to a comprehensive agreement on the issues of importance to Northern Ireland and the Republic of Ireland? Is a frictionless border on this island achievable?

Will UK-EU trade in manufactured goods and farm products be disrupted by failure to agree a customs union and/or a single market?

How will the 'common travel area' for the UK and Ireland operate?

How will the post-Brexit environment affect the attraction of inward investment, north and south, and how will this influence policy decisions affecting FDI?

If the UK-EU negotiations fail, then a crash landing will be an unwelcome event, north or south, on this island.

The Irish border has been central to the Brexit debate.

Much of the debate has been in generic terms: a frictionless border, no hard border.

The main objective for business, north and south, is to avoid trade barriers for locally manufactured goods and farm produce which disrupt business across the island.

The border question might be better understood as a search for a mechanism that gives an unchanged market for goods and services of Irish and Northern Ireland origin.

The Irish border should not be a problem, because it may become a back-door to the EU for goods routed through the UK.

A 'rules of origin' agreement could be a better target than a duty free, customs free, formula. Goods of non-Irish origin, traded through the Irish border could be subject to normal customs duties with sensitive customs clearance obligations.

If there is a UK-EU agreement that UK-EU trade can be treated as functioning with the equivalent to the same arrangements as a customs union, the Irish border question might be solved co-incidentally at an international level.

If there is no free trade agreement for the UK-EU, then the Irish border, unavoidably, becomes an international frontier and any UK customs duty will be levied on imports from the EU (of 27).

One of the major uncertainties to be clarified as part of Brexit is the extent and operational detail of the UK-Ireland common travel area.

If the two national governments wish to maximise the benefits of the 'common travel' arrangements (and if the Irish gain the support of the EU on the Irish details) then this arrangement might be more than a Schengen-type travel agreement.

However, this could potentially be a wider agreement. The agreement might allow cross-border changes of residence and an unfettered ability to seek employment across the UK and Irish borders.

If the UK-EU does not retain the existing cross-border social security and health service arrangements, as seems likely, then the UK and Irish governments will be expected to find a comparable arrangement for citizens.

A special knock-for-knock health, pensions and social security agreement might be welcome and not prove controversial.

For the benefit of both parts of Ireland, there is a case to be made that attracting external business investment should be developed in a way which avoids excessive competition for FDI.

Critically important would be a common rule book for state aid (offered to investors). An agreement to accept state aid limits and a monitoring mechanism would make sense.

Otherwise competition through excess aids could be mutually disadvantageous.

If, in the event of 'no deal', the Irish border becomes a legal hurdle, the common travel area becomes a nominal but ineffective reassurance, and north-south development policies become more competitive, not co-operative, then next April, Brexit will have done the people of this island a disservice.

Belfast Telegraph

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