29 November 2017

CityLab: How Brexit Got Snagged on the Irish Border

When Brexit happens, it will create the U.K.’s first-ever land border with the E.U., on the frontier between the Republic of Ireland and Northern Ireland. This shouldn’t pose passport problems, because the U.K. and Ireland have a longstanding passport-free Common Travel Area agreement. But because Britain is on course to leave the E.U.’s tariff-free single market, imports and exports must somehow be monitored across this 310-mile-long barrier. Controlling this flow by a so-called “hard” border—that is, one with checkpoints and customs controls—would be quite the job. Looking in one direction alone, Northern Irish exports to the Republic are worth £3.6 billion ($4.8 billion) a year, while there are a total of 275 land crossings between the two parts of the island, more than twice the number there are along the E.U.’s entire eastern frontier. A hard border here could thus be a nightmare for both countries. [...]

If that sounds a little too easy, it’s because it is. With no controls for smaller businesses, the Irish border would become a quasi-legal smuggling paradise for importers wanting to avoid paying duty on their goods. There would be nothing to stop, say, a non-European company flying their goods into Belfast, then using a constellation of smaller companies to get it across the border tariff-free. There’s no way the E.U. could accept this. It could end up being a weird backdoor version of the single market—which Britain says it wants to leave.

And E.U. resistance isn’t the only barrier to this plan becoming a reality. Allowing E.U. importers to get their goods into Britain tax-free over the Irish border would be giving their countries preferential treatment, which would break World Trade Organization rules and expose the U.K. to a tsunami of litigation. [...]

Since the referendum, the U.K. government has already risked jeopardizing the 1998 Good Friday Agreement that brokered peace in the region by forming an electoral alliance with the hard-line loyalist Democratic Unionist Party. By attaching its electoral future to a sectarian party, the British national government has called into question its ability to maintain the “rigorous impartiality” stipulated by the agreement. If that weren’t bad enough, the U.K. is now hurtling toward re-solidifying the border—and potentially toppling a carefully balanced status quo—while contriving to insist that it’s doing nothing of the sort.  

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