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Brexit: why you pay your money and you take your choice

What are the options for cross-border trade we can expect after the UK's exit from the European Union, asks Katy Hayward


David Davis and the European Union Chief Negotiator in charge of Brexit negotiations with Britain, Michel Barnier

David Davis and the European Union Chief Negotiator in charge of Brexit negotiations with Britain, Michel Barnier

David Davis and the European Union Chief Negotiator in charge of Brexit negotiations with Britain, Michel Barnier

The European Council has given an unusual playing card to the UK government by stating an openness to 'flexible and imaginative solutions' for managing the Irish border after Brexit.

The fact is, however, that these 'flexible and imaginative solutions' have to come from the UK government in the first instance.

Instead, so far, there has been only an effort to reassure people that a 'hard border' would be avoided by the use of technological solutions. This reflects the crude assumption that by 'hard border' one simply means 'visible border'.

However, the real impact of a 'hard border' hits far away from the actual crossing - it is felt in the obstacles to trade, to supply chains, to employment catchment areas, to business cooperation and expansion, and in the additional costs and delays entailed in crossing the border. At the moment, the Irish border is 'seamless and frictionless' (to use Theresa May's phrase) because Single Market and Customs Union membership (in the EU) together covers domestic goods and imported goods.

Exit from either of those necessitates border controls of some sort; technological solutions will not substitute for these controls nor entirely avert the need for checks.

To posit 'technological solutions' at this stage is like trying to decide on the light fittings before you have even got planning permission for the house.

When the Irish government expressed its frustration at the lack of progress on this matter, it did so because it is still unclear as to whether the UK government wishes to build a neo-colonial mansion or a modest semi on the plot of land 'wrested' from the EU.

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This needs to be made clear as soon as possible in order to make progress on two tracks. For there are two agreements that have to be negotiated in Brussels: the exit deal and the future trade arrangement. David Davis is quite right to note that we can't be completely clear about the post-Brexit Irish border until we know the nature of the future trade arrangement.

However, it would be sufficient at this stage for Davis and his team to set out what future trade arrangement they are aiming for, so that the exit negotiations can work towards this.

This would ensure, for example, that certain aspects of standardisation and regulatory coordination across the Irish border could be preserved by the exit deal in order to be able to facilitate the trading relationship intended to follow it.

And what are the options for the future UK/EU trade relationship? There are three ballpark scenarios.

First, to remain in the Single Market. This would be the most straightforward as it would mean continuing membership of the European Economic Area (EEA), albeit via an application to join the European Free Trade Association (EFTA) and subject to the approval of the EEA members.

The UK would have to accept the existing EFTA trade deals, it would still make budgetary contributions and be subject to the jurisdiction of the European Court of Justice, but it would have some scope to pursue an independent trade policy.

For the Irish border, UK EEA membership would mean that freedom of movement (of people, goods, services and capital) would continue unabated and that there would continue to be a matching of standards and regulations on both sides. Customs checks, however, would be required for goods coming from outside the EU and for those goods not covered by EEA membership, which unfortunately would include agricultural produce.

The second option would be a bespoke customs union with the EU. This would require more negotiation/transition time as it is not an 'off the shelf' solution.

The UK would have tariff-free trade with the EU (although, again, not in agricultural produce, unless that was specially arranged) but it would have little freedom in the deals it makes outside the EU, it would have to apply the Common External Tariff, and it would need to continue to comply with EU regulations and harmonisation in some areas.

For the Irish border, the UK being in a customs union with the EU would mean tariff-free trade, but it would not secure freedom of movement of people or services.

Customs documentation and checks would be required on the Irish border for (among many other things) compliance with standards, Rules of Origin, and for agricultural produce (which could be subject to tariffs and quotas).

Finally, there is the option of a deep and comprehensive free trade arrangement, such as with Canada.

There is no hope that this can be finalised on top of the exit deal within the coming year so any transitional arrangement would be vital. This would offer an escape from the jurisdiction of the ECJ, the freedom to negotiate other deals, and an end to budgetary contributions to the EU.

However, this would mean a 'hard' customs Irish border in that divergence between Northern Ireland and the Republic of Ireland would increase and Northern Ireland would presumably be open to goods that are restricted in the EU Single Market (eg the infamous chlorinated chicken).

Of course, there is another option: a 'no deal' Brexit, in which the UK leaves with no trade agreement in place and falls back on WTO terms.

This would automatically mean the hardest form of economic border between the UK and Ireland as tariffs would have to be applied both ways and there would be no regulatory equivalence between them.

Even if this were the will of the UK government and unionist parties, to hurtle towards this outcome with no preparation and no information is to leave businesses, services and citizens brutally and unnecessarily exposed.

Flexibility and imagination cannot be gifted by the EU - it must be demonstrated by the UK as an act of sovereignty and self-preservation.

  • Dr Katy Hayward is a senior lecturer in social divisions and conflict at Queen's University, Belfast

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