by John Bruton, Former Irish Prime Minister and former EU Ambassador to the United States
Mrs May: Tell Us Exactly What Sort of Deal You Want With The EU Customs Union
DUP: Tell Us What Sort of Agricultural Policy You Want in Northern Ireland After Brexit
Sinn Fein: Tell Us Why You Will Not Go into the House Of Commons Next Month to Fight For Irish Interests On the New Brexit Laws
It is unfortunate that the United Kingdom government decided to trigger article 50 , without first working out, around the Cabinet table, what sort of relationship the UK could reasonably expect to have with its neighbours after it had left the EU.
It is true that Mrs. May presented a wish list in her Lancaster House speech. But this list was, and is, impossible to achieve because it took no account of WTO rules, and of the fact that commerce can only be free, if the rules governing it remain reasonably uniform.
She said that, on the day it leaves the EU, the UK will retain all the then existing EU rules for goods and services, but would be free change them, by Act of Parliament or by legal reinterpretation from then on. This implies a gradual, surreptitious, hardening of the border in Ireland, as UK standards begin to diverge from EU standards.
To the extent that the UK diverges from EU standards, the UK businesses will have to apply two sets of standards, one for the UK market, and another for the 45% of UK exports that go to the EU.
Once the UK has left the EU, goods, coming into the EU (including into Ireland), from the UK will also be subject to checking under “Rules of Origin” requirements, to see that they do not contain impermissible non UK content. For example, there might have to be checks that UK beef burgers do not contain Brazilian beef. These “Rules of Origin” checks will involve bureaucracy, which will be especially onerous for small firms.
One study estimated that the need to apply “Rules of Origin” checks could reduce trade volumes by 9%. The EU/ Canada trade Agreement has 100 pages on “Rules of origin” alone.
As far as imports into the EU at Dundalk or Lifford are concerned, it will be Irish, not UK, officials who will have the distasteful job of enforcing the border. Irish officials will have to check whether EU safety, sanitary, origin and other rules have been met. This is something being imposed on us, as an EU member, by a UK decision.
It will not be done cheaply. A House of Lords Committee said that “electronic systems are not available to accurately record cross border movements of goods”. If the UK government knows otherwise, it should produce the evidence…without delay.
Even if a light or random system of checking at the border or in ports is imposed, the biggest costs will have to be met by businesses, before they get anywhere near the port or the border.
The preparation of all the extra compliance documentation will deter many smaller firms from exporting at all. For example it has been estimated that the number of customs declarations that UK firms will have to prepare and present will jump from 90 million a year to 390 million once the UK leaves the EU. Irish firms will have a similar extra burden in their dealings with the UK.
The focus on the Irish border should not deflect attention from the impact of Brexit on East/ West trade. Indigenously owned Irish exported rely disproportionately on the UK market, and their customers are predominantly on the island of Britain, rather than in Northern Ireland. The bulk of Irish exports to continental Europe transit through Britain
MRS MAY AND THE CUSTOMS UNION
Theresa May was remarkably unclear, in her Lancaster House speech, about the sort of relationship she wanted with the EU Customs Union. She wanted bits of it, but not all of it.
This would run into immediate difficulties with the World Trade Organisation (WTO). The WTO works on the basis of non discrimination, or the so called “Most Favoured Nation” principle.
This means that any concessions the EU Customs Union might grant to the UK, as a non EU member, would have to be extended by the EU to ALL the EU Customs Union’s trading partners. That is unless the special UK concessions cover “substantially all” trade between the UK and the Customs Union. The UK will have to be either ”substantially in”, or “substantially out”, of the Customs Union. Which does Mrs May want? She should be able to answer that question by now.
Many suspect the UK wants to leave the Customs Union so it can revert to the cheap food policy, that it had before it joined the common Market. To prevent the undermining of the EU Common Agricultural Policy that would flow from that, Ireland would then be obliged to collect the EU Common External Tariff on products like beef, milk, lamb, confectionary and other food products crossing our border, or arriving at our ports, from the UK.
THE DUP AND AGRICULTURE
Farmers, and investors in the food industry, need to know what sort of agricultural policy the UK will choose after it leaves the EU. Only then can Ireland know whether it will have to collect these very high EU tariffs at the border, and whether the entire Irish food industry(on both sides of the border) will have to be diverted to other markets.
The Democratic Unionist Party, which supported Brexit, and which now dispensing gratuitous advice to the Irish Government on EU matters, should tell us exactly what sort of UK agriculture and food policy it expects post Brexit. It is now in a good position to get an answer to that question from the UK government. Its own farming supporters would like to know.
SINN FEIN VACATES THE FIELD
The DUP is not the only party that needs to examine its position.
In September the UK Parliament will begin debate on the European Union Withdrawal Bill, which will allow for UK standards of goods and services to diverge from existing EU standards, thereby deepening the Irish border.
Thanks to the abstentionist policy of Sinn Fein, there will be no Irish Nationalist MPs in that debate able to put forward amendments to mitigate the hardening of the border that this legislation will allow. Until this year, 3 SDLP MPs would have been there , but now, when their presence was never more necessary, the voters have replaced them by Sinn Fein MP’s, who will draw their salaries, but will stay away when decisions have to be made, leaving the field to the DUP.
Sinn Fein should remember that the Irish people, on both sides of the border, accepted the Good Friday Agreement in a Referendum in 1998, and that removes any “nationalist” argument Sinn Fein might have had for not taking their seats. If Sinn Fein can shake hands with the Queen, if they can take their seats in Stormont, they can take their seats in Westminster!
There is work for them to do there now.
Compliments of John Bruton, Former Irish Prime Minister and former EU Ambassador to the United States