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Esmond Birnie: A report worth considering, but in the end it’ll take two to tango

By Esmond Birnie

German Chancellor Angela Merkel challenged Prime Minister Boris Johnson to produce an alternative to the border backstop in 30 days. His response was Wir Schaffen Das (We can do it).

Chancellor Merkel's flexibility may reflect advice from three of the German economic research institutes that too hard a line on the backstop could be a major strategic blunder for the EU, but was Johnson's optimistic response justified? The most detailed alternative to the backstop may be the 270-page report published last month by the Alternative Arrangements Commission (AAC).

The AAC was responding to the backstop: the cast-iron guarantee by the London Government that Northern Ireland would in effect remain aligned to the customs union and single market.

Such a backstop arrangement begged the question as to what would happen if a London Government decided it wished the UK to exit the customs union and single market? Either they would be denied any unilateral right to exit or they could do so only at the price of leaving Northern Ireland behind. In any case, the backstop proved unacceptable to the House of Commons - Prime Minister May's withdrawal agreement was voted down on three occasions.

Hence the importance of the AAC. The AAC consists of some Conservative MPs led by Greg Hands and Nicky Morgan. The AAC think they have squared the circle - Brexit UK would depart the customs union and single market whilst the Irish border would remain relatively frictionless.

The AAC propose authorised economic operator or trusted trader status. There could be particular exemptions for the smallest businesses. GPS technology would be used to track cross-border movements of lorries. Customs declarations could be combined with tax returns.

Some questions do arise. The elements of what they propose are found in a number of examples across the world, but nowhere else has applied the complete package. How long would it take to put the arrangements in place? A longer transition period may be necessary.

Movements of animals and food products are especially problematic.

If imports are allowed at all, the EU's official line is that inspections must be done at the frontier. There may be some wriggle room in terms of EU law, as suggested by existing arrangements between the EU and Switzerland, which were noted in recent legal advice to the Northern Ireland departments. The AAC suggest mobile units to provide agri-food inspections. The Johnson/Brexiteer line seems to be "no hard border" means avoiding infrastructure at the border. Opponents of Brexit and/or proponents of the backstop seem to be defining what they want in terms of no new infrastructure anywhere and no additional business costs of any kind.

The greatest question of all about the AAC is whether the EU27, and especially Dublin, will agree to such proposals - in this case, it will take two to tango. The AAC proposals are certainly worth considering, given the paradox that too strong an insistence on the backstop could actually produce the no-deal outcome which many people fear the most.

  • Dr Esmond Birnie is senior economist at Ulster University Business School

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