Friday 23 February 2018

High expectations over EU response to UK's scattergun approach to Brexit

The British government's ideas on how to deal with the Border are just one issue where more answers are needed, writes Ailish O'Hora

John Comer, president of the Irish Creamery and Milk Suppliers Association, doubts a ‘frictionless’ Border could work, given French farmers’ opposition to illegal movement of goods. Photo: Keith Heneghan
John Comer, president of the Irish Creamery and Milk Suppliers Association, doubts a ‘frictionless’ Border could work, given French farmers’ opposition to illegal movement of goods. Photo: Keith Heneghan

It's the old waiting for the bus joke. You wait ages for one and then three come along at the same time. In the case of the UK's opening gambit with new Brexit policy papers released last week, all three buses are out of service. In other words, what we got in the British government papers, while welcome as a basis for discussion, were proposals that were largely aspirational.

And Foreign Affairs Minister Simon Coveney was quick to point out that Ireland would not be used as a pawn in what was a UK vote to leave the EU. He rightly pointed out that Ireland was, in fact, still part of the EU and its negotiating team headed up by the EU's chief Brexit negotiator Michel Barnier.

"There are still significant questions that are unanswered in terms of how we are going to manage and maintain as close as possible to the status quo on the island of Ireland in terms of free movement of goods and services in the future and ensuring that we maintain an invisible border," he said.

"Make no mistake, we are part of the EU negotiating team. Michel Barnier is representing Irish interests as well as European interests as part of the negotiations and that is where we have our strength, as 27 negotiating together."

He added that Ireland will be fair and realistic but also stubborn. This seems to be a nod to the slightly more hawkish approach to negotiations taken by the Government since Leo Varadkar took over as Taoiseach.

This sentiment also ties in with a sense of growing frustration in Brussels at the seemingly scattergun UK approach to Brexit. Brussels has long said the initial talks would focus on three main planks - citizens' rights, the UK exit bill and Ireland, including the border before moving on to trade.

But in bringing out a paper on the customs union earlier this week, the UK seems to have jumped the gun and sent the wrong message again.

And it emerged later in the week that talks between the UK and the EU on Brexit due to take place in October could be pushed out until later in the year because the European side believes that not enough progress has been made.

"Progress depends entirely on the UK and how ready they are, and there are three more rounds of negotiations due before October," said one Brussels source.

There are three layers of negotiations ongoing, the source added. At the top level you have Michel Barnier and David Davis, the UK's secretary of state for exiting the European Union.

The second tier involves the deputies - on the UK side there's Olly Robbins, who is the permanent secretary for departing the EU and Sabine Weyand is the European Commission's deputy chief negotiator.

Ireland is being discussed at the deputy level because the discussions are still at the political stage.

The third tier is the working groups and discussions here have moved onto a technical level for the three key themes of citizens' rights, the financial settlement or exit bill and other separation issues like energy security.

For all the documents, though, there's one glaring issue and it's that of the Border.

In the UK's Ireland paper, the proposal seems to be an invisible Border, but it's hard to see how this would work on a practical level for a range of industries from trade to agriculture.

Under the Whitehall proposals, the paper emphasised that there should be no physical infrastructure including customs posts, CCTV cameras or number plate recognition technology along the 300-mile border.

John Comer, president of the Irish Creamery and Milk Suppliers Association, said: "We've already had kite-flying from French farm leader Christophe Hillairet who was adamant that there would be no invisible border because the EU has a duty to protect its borders from illegal movement of goods that could disadvantage its members and the French and Germans are the power brokers in Europe.

"If there are goods and services travelling from a 'third country' into and out of the EU, it's impossible to imagine a frictionless border.

"There's been a lot of integration between north and south in the agri-food business which was accelerated with the peace process - 26pc of milk produced north of the Border comes to the Republic to be processed, for example," he added.

Mr Comer added that while an invisible border would suit Ireland, Brexit is turning into an economic battle with the uncertainty already stifling investment.

The proposal of a frictionless border is essentially Britain asking Brussels to cede control of what goes in and out of the single market and certainly seems too much of an ask.

There are other proposals from the UK that are also hard to fathom from a business perspective.

For example, the idea that there would be wide-ranging tariff exemptions for SMEs in the Ireland paper is also a hard one to square - the UK has defined these businesses as having up to 250 employees.

And while these proposals have been widely welcomed by the SME community, it's hard to see how this would work given both World Trade Organisation and EU rules.

A secondary concern would be the control of illegitimate trade and smuggling.

Having said that, business organisations did welcome some aspects of the proposals. "Some parts of the proposals we would support like the proposal for staying in the common transit convention which simplifies border crossings for goods and trade," said Pat Ivory, Director of EU & International Affairs at business representative group Ibec.

"But in terms of the UK leaving the customs union, that leaves big challenges," he added.

In fact, Davis has already put the UK on a collision course with the EU by insisting on the right to sign other trade deals immediately after Brexit while remaining in a customs union. And a former EU trade commissioner Karel De Gucht said Brussels was likely to block customs proposals on those terms.

It's important to remember that the no vote was not the referendum result that most people had expected and this seems to have dogged the UK side from day one.

Certainly these latest policy papers seem to be hugely aspirational, big on promises and lacking in solutions although it is important to remember they are the first salvo.

So it will be interesting to see how the EU addresses the solutions side in its Commission Ireland policy paper which is due in the autumn and could be released as early as next month.

Expectations here will be pretty high.

Sunday Indo Business

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