Belfast Telegraph

Why political posturing over Brexit should stop


By John Simpson

The politics of Brexit have a potential to disrupt sensible economics. While national and regional party politicians are keen to set out their constraints to the deal(s) yet to be finalised, there is a sensible debate to take place on building a Brexit process with minimal damage to the economies of the Republic of Ireland, the UK and Northern Ireland.

Would it be non-controversial if the Brexit process was judged by a combination of accepting that the UK Government's decision to proceed has been made along with an assumption that the trading mechanisms between the UK and the Irish Republic should be managed to minimise any distortions of the existing market determined outcomes?

To date, too many of the public contributions to the debate have been negative. But there are options that can avoid what others would regard as an unacceptable political assertion. The search should be for trading arrangements that facilitate and encourage the interdependence of businesses on this island, north or south.

Many existing differences, north and south, will continue. The euro and sterling will co-exist within separate monetary regimes. Taxation differences will continue. Excise duties on spirits, cigarettes and petrol will continue to offer a margin of cross-border incentives for purchasers. Even the Common Travel Area will give continuing rights of travel, residence and some identified shared public service obligations. Irish and British nationals will not be subject to immigration controls on living and working in either country.

The difficult decisions centre on the regulation and monitoring of cross-border trade in goods. There is no certainty, yet, on the possible introduction of customs duties on goods entering the UK or vice versa. If there are customs duties (or other levies or obligations on standards) affecting UK imports, then in theory that would apply to imports from the Republic of Ireland to the UK, particularly if imported to Northern Ireland. There are slightly different dimensions to the flow of imports depending on whether the flow is into the UK or into the Republic. The former will be a process regulated by the UK Government; the latter is a process to be regulated as part of the EU customs union and single market. Legally, unless special rules are agreed by the EU, the Irish administration is not the decision-making organisation. Ideally, the Brexit negotiations should try to find an agreed outcome for both the UK and the EU, but it may reflect different institutional structures.

From a UK perspective, including the interests of NI, there is a valid case to be made that the UK should facilitate the continuance of 'free' cross-border trade as currently exists. Irish-made goods should trade on this island without restraint. The UK Government has already moved to allow this flexibility by suggesting that Irish-made goods from SME businesses should have this continuing advantage.

Two questions then remain: why not extend this provision to include Irish large businesses (outside the SME range) and how should the UK system deal with trade across the Irish border for goods arriving in the Republic of Ireland from 'third parties/other countries' and coming to the UK through what might be seen as a 'back door'. The critical issue is that goods classified as of Irish origin would come into the UK with no customs charges. From an EU perspective, is the commission ready to add a protocol to the Brexit agreement that says that goods classified as of Northern Ireland origin would be admitted to the Republic of Ireland (and the wider EU) duty free? Rules would also be needed to avoid 'back door' abuse.

There are workable answers to the Brexit dilemmas: difficult political posturing should be avoided.

Belfast Telegraph

Weekly Business Digest Newsletter

This week's business news headlines, directly to your inbox every Tuesday.