Monday 21 October 2019

Dan O'Brien: 'If we don't impose Border checks after no-deal Brexit, it will undermine our place in the EU's single market'

'Macron is more concerned about 60 million of his own citizens than six million on this island, many of whom never go near the Border.' Photo: REUTERS
'Macron is more concerned about 60 million of his own citizens than six million on this island, many of whom never go near the Border.' Photo: REUTERS
Dan O'Brien

Dan O'Brien

"The worst possible outcome of Brexit for Ireland would be the UK crashing out of the EU without a deal next March." These were the first words of former Taoiseach John Bruton in these pages yesterday.

His opinion is widely shared. Yet just such a no-deal outcome is, in my view, now considerably more likely than an agreed exit next March.

Some insiders and observers are more optimistic. They believe that London will concede to the demands of Dublin and Brussels and that Theresa May will ram a deal through Westminster.

However, all observers of the Brexit negotiations, now stalled for a full 12 months over the Northern Ireland backstop, see a considerable risk of a no-deal exit taking place 141 days from today.

Thinking about this eventuality and making preparations for it are essential. Hopefully it won't come to pass, but such is the potential for disruption that people, organisations and the various parts of government need to plan and prepare for it.

This column has stressed in the past that while exporters to the UK face real problems, and those problems have been much discussed, more attention needs to be paid to importers and the goods they ship in from Britain.

Almost everyone in the Republic consumes goods imported from Britain in one form or another. Not everyone is involved in exporting to Britain. More consideration is needed of possible shortages of food and other essentials in the event of a no-deal Brexit.

Another issue that has had even less attention is Ireland's place in the EU's single market. Frictionless access to a market of 500 million consumers has been the primary reason so many foreign exporting companies have located in Ireland over decades.

Most people in Ireland are aware of the central role EU membership has had in creating the northern European levels of prosperity which are enjoyed today.

It is in large part for this reason that support for membership is among the highest in Europe and why those advocating following Britain out the EU door have won so little backing.

But a no-deal Brexit indirectly threatens Ireland's position in the EU's single market. From March of next year, if no deal is reached and the 21-month "transition" period (continued membership in all but name) does not come into effect, the Border on this island will become an external border of the EU's single market overnight.

Member countries who have such borders are obliged to police them on behalf of all other members. They must, for instance, collect the EU's "common external tariff" - a uniform tax imposed on goods imported from countries outside the bloc. They must also check that goods coming into the EU meet EU laws and standards.

The Irish Government's stated position is that it will not change how the Border currently operates under any circumstances.

It has publicly rejected any suggestion that Irish customs officials would make checks and collect tariffs on goods crossing from Northern Ireland. This raises the prospect of Ireland becoming a back door into the EU market.

To see the possible consequences of this, consider the oft-used example of Brazilian beef.

If the UK, unconstrained by EU policies, decides to cut the EU's (high) tariff on meat products from other countries, British importers would switch from expensive Irish beef to cheaper south American beef. Supermarkets in Newry and Derry would sell this meat.

Individuals, restaurateurs and others in the Republic would have every incentive to buy this much cheaper product and transport it across an invisible border.

Enterprising burger-makers would see the opportunity of selling it into the continental market, under-cutting EU farmers and meat producers.

French farmers' representatives have been long alive to this possibility. So is the French government. While Paris has been staunchly behind Ireland in its backstop demands, its support is not motivated solely by solidarity with another EU member country.

France sees itself as a leader in Europe. Leaders provide leadership on protecting the integrity of the wider system. Allowing Britain the best of both worlds - the benefits of EU membership without the costs and obligations - would pose a threat to that system. This is an important factor in France's hard line with the British.

But French President Emmanuel Macron is more concerned about 60 million of his own citizens than he is about six million people on this island, many of whom never go near the Border.

If the Irish Border becomes a back door into the EU's single market then it is very likely that goods arriving at French ports from Ireland will eventually be subject to checks to ensure that products, such as Brazilian beef, do not find their way onto the French market. Such checks would raise questions about Ireland's de facto membership of the single market.

Ireland's world has been turned upside down in recent years. Relations with two of our three most important partners have been transformed: Donald Trump has made the US an unreliable ally, while Brexit has convulsed relations with the UK.

The EU is the third strand of Ireland's three most important ties with the rest of the world. The EU single market (excluding the UK) is by far Ireland's largest trading partner.

One of the many huge downsides of Brexit is that Ireland will face a choice if there is no deal with the UK.

It will have to introduce some form of checks on goods coming from Northern Ireland or, eventually, continental countries will start checking goods coming from the Republic. If questions arise over Ireland's position in the EU's single market, the many companies which use Ireland as a base to service that market will start to question their presence here. Companies considering locating here will look elsewhere.

Brexit was always going to be very bad for Ireland. If it ends up undermining the country's place in the EU's single market, it will be economically disastrous.

Irish Independent

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