Monday 16 July 2018

Border focus is a distraction from EU special status risks

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Stock image
Brendan Keenan

Brendan Keenan

IT is reported that Sean MacBride, as Foreign Affairs Minister, was reluctant to accept US dollars under the post-war Marshall plan unless the USA made explicit its opposition to the partition of Ireland.

Who would have thought that the Border would ever again impinge upon Ireland's economic policies? But never say never.

Even further back, at the 1912 constitutional convention - whose centenary John Bruton tried unsuccessfully to have given the attention it deserved - one delegate said the only options for the Ulster question were coercion ("military solution" in today's lingo), "which was intolerable"; or partition, which was unthinkable.

Most people still thought it was unthinkable until it happened. Even when it did, many, including some leaders of the new Irish state, thought it could not last.

The lesson to be learnt in today's circumstances is that anything can happen and some of it can be very bad. There is no room for wishful thinking, or being distracted by detail.

In a curious way, the attention given to the Border is a distraction, one which could be dangerous if dealing with the Border question becomes the central issue.

Already, people could be forgiven for thinking that if they can cross the Border freely, and the trucks are checked somewhere else, all will be well.

It will not of course. The main advantage of last week's blizzard of reports from the British government was not so much what they contained, but that they turned some much needed attention towards the central questions, and even on that government's attitude towards them.

This has changed dramatically, but in such a confused manner that it would be easy to miss the change. When Remain Chancellor Philip Hammond and Brexit ministers Liam Fox and Michael Gove issued a statement saying the UK would indeed leave both the customs union and the single market, it looked like a hardening of the position.

It certainly showed Mr Hammond positioning himself for the party leadership. But the statement had all three in favour of a transitional arrangement after formal exit in 2019.

That is a major change for the Brexiteers. One might well ask how they could ever have thought otherwise, but they did, and it is surely an indication that this is all still to play for.

The question here is what should the Irish Government be playing for, and how should it go about it?

In a paper published by the Institute for International and European Affairs (IIEA) lawyer and former Commission official John Temple Lang argues the membership of the EEA (European Economic Area offers the best, and perhaps the only, solution, both for the UK as a whole and Scotland in particular, as well as for both parts of Ireland.

Here then, is the diplomatic objective for the Government - probably the most difficult and delicate since de Valera kept us out of the war; maybe since the Treaty negotiations themselves. The stakes may not be quite as high as those, but they are high enough.

The Department of Finance has already calculated the intolerable consequences of a disorderly Brexit. That is a better word than 'hard', which implies a deliberate choice. It is clear no one who matters wants that choice now. It could still happen though.

As one official put it, Ireland is "off the EU chart" when it comes to the exposure of its food, indigenous manufacturing and chemical industries. It is not just agri-business, although it is the most vulnerable, with almost 50pc exposure to the UK. Apart from Cyprus at 25pc, the next most exposed, not surprisingly, are Holland and Denmark but their figure is just 10pc. Doubtless this is a concern to them, and they may be useful allies, but it is not the cataclysm it represents for Ireland.

The vulnerable sectors count for more than just their economic size. They are the sinews of the economy outside Dublin and the foundation of social life, especially in the border region. No wonder Mr Varadkar got tired of talk about cameras and off-line customs posts.

If trade is not free, or nearly so, an invisible border will make no difference to the damage done. That is why the British report on how it might operate is less relevant that the previous day's one on UK intentions.

Free movement of people may well continue, irrespective of the outcome of the negotiations, but that outcome will decide the nature of the border and determine the degree of loss in Irish incomes, employment, creditworthiness and social cohesion.

First up is the transition arrangement. Ireland's challenge is to persuade both Britain and the 26 that a cliff-edge departure in 2019 would be bad for them, even if worse for us. The challenge should not be underestimated.

The reports seemed to show that the UK has few, if any, realistic ideas as to how the transition should be organised. It would be nice to think this is an opening negotiating position, but it probably isn't. Even with the best will in the world, it would be hard to find answers.

There is little legal basis for such transitional arrangements. The difficulties have increased after the European Parliament's decision to put a time limit of three years on any such arrangements, even though governments had merely said there should be some limit.

At the risk of sounding glib; to use the divorce analogy, the disputing parties have to agree what happens to the house, the children and the fish knives, and then carry on together for three years as if nothing had happened.

People in Britain are beginning to say, ever so quietly, that perhaps in the end nothing should happen; or at the most, membership of the EEA or something very like it.

But the politics are poisonous, with the Labour Party's Brexit spokesman Barry Gardiner - who himself voted to remain - saying such an arrangement would make the UK "a vassal state".

Even if a transitional arrangement is secured, the Government is right to keep planning for the worst, as well as hoping for the best, and at least there would be some extra time to get ready.

It is in those years that any special arrangements on the island of Ireland would be negotiated.

There is much talk of the North somehow remaining in the customs union, but little on how "special status" would work in practice.

There are also a dreadful dilemmas as in all of that. As so often before, an Irish Government would face making choices between the interests of the Republic and those of the North and the island as a whole.

In this case, a vital requirement for Dublin is that its full membership of the EU does not come into question.

Another is that, if the UK does fully exit, the other 26 will recognise that the Republic requires assistance on a scale different from any other member state.

The unpalatable truth is that special arrangements on the island could well threaten both of these objectives; making markets speculate more about Irexit and EU governments think they have done enough for Ireland, especially since cash will be in short supply without Britain's contribution.

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