By Alice Antoine-Gregoire
Best for Britain's External Affairs Officer
It is a mark of the odd times in which we live that the announcement of border controls between the UK and the UK passed with precious little fuss. At some point in the not-too-distant future, there will checkpoints at entry ports to Northern Ireland from Great Britain, as the Great European Divorce wends its way to a continental decree absolute.
In this respect, Northern Ireland finds itself the innocent subject of a huge geo-economic experiment. NI must be in Europe, but not of Europe. Or vice-versa. No one is really sure.
It’s a political version of Schrödinger’s cat (O’Dinger’s cat, perhaps) but, instead of being simultaneously alive and dead, Northern Ireland must be simultaneously in the EU and not in the EU, all the time without a say in European laws, and subject to the rules of the UK.
It really is a hellish muddle, and pity the poor businesses that will have to negotiate the new set-up, assuming they have survived the beatings doled out by Covid-19 and a tanking economy.
Here are just a few of the questions around the issue…
What’s the problem here?
The Irish border between north and south is a sensitive issue, and the removal of checkpoints in the wake of the Good Friday Agreement (GFA) has been seen as a very visible sign that the politics of Ireland have changed for the better. Neither the EU nor Britain – nor the powerful Irish lobby in the US – wants to see a hard border return, amid warnings of the GFA being jeopardised and violence occurring as a direct result.
So what has Boris Johnson done?
Johnson agreed to the Protocol on Ireland and Northern Ireland and sensibly opted to avoid reinstating a hard border between north and south. But he had another choice to make – between maintaining Northern Ireland’s seamless integration with the UK mainland, or prioritising Great Britain’s ability to sign free trade deals.
Why did he have to choose one or the other?
Because, with no hard border in Ireland, the only way authorities could control the movement of people and goods would be with a border elsewhere – the ‘Irish Sea’ border. The alternative would be for Britain to adhere to EU standards, restricting the ability to cut trade deals and, of course, presenting some political issues over who was actually in control of everything. Which is why there will now effectively be a border between Northern Ireland and Great Britain.
What does this mean in practice?
It means things start to get complicated. Goods coming into Northern Ireland from GB (and the rest of the world) will be treated as if they are arriving in the EU, and that means the potential for checks and red tape.
Exactly. However … according to the Protocol, exceptions to this may be permitted if there is little risk of the goods in question being shuffled quietly (and illegally) over the border into Ireland and, by default, the EU. Smuggling, in other words.
That means the EU and UK have to trust one another?
Unfortunately, yes. The usual sabre-rattling and brinksmanship has already been going on but, crucially, EU chief negotiator Michel Barnier has maintained that Europe is prepared to ‘de-dramatise’ the new border between GB and NI.
What does that even mean?
Fair question. It’s all about minimising how much bureaucracy is realistically needed to make the new border work. For example, the final destination of a given good is obviously a factor. But so is the type of good and its value – and what incentives there are for nefarious types to smuggle it.
That’s to make sure the EU gets the money from tariffs?
No. The UK has to levy EU tariffs on imports into NI but the Protocol does not oblige the UK to pass that money on to the EU. The EU’s over-riding concern is to prevent goods entering NI under a lower or zero tariff, and then being sent on to the EU (or being used in the manufacture of goods that are then sent to the EU). That would be cheating the system, and it would give NI businesses an unfair advantage over their European counterparts.
Surely the EU and UK should agree to get rid of the offending tariffs then?
Indeed (and Europe will be worried only when UK tariffs are lower, not higher than their EU equivalents), but that would necessitate a free trade agreement which, as things stand, could be derailed by all manner of issues, not least of which are ‘level playing field’ commitments and fishing quotas.
Anything Britain could do to speed things along?
Actually, yes. The Centre for European Reform (CER) has come up with some pragmatic suggestions, for example. These include Britain producing a schedule of tariffs for ‘most-favoured nations’ – those countries we are cutting a good deal with. That will make it easier to draw up a list of risky products and, conversely, make it easier for non-risky products to be imported to NI from GB (or elsewhere) duty free. Goods on the ‘at risk’ list will be subject to EU tariffs unless there is proof that the final sale is in NI, and there is no onward chain to within the EU. The Government has already made available an online checking tool to show what global tariffs Britain will apply post-transition, and how those differ from the present common external tariffs. However, that does not take account of other import duties, such as anti-dumping, countervailing or safeguards duties, or any other form of restrictions on imports.
A carrot and stick approach
The CER also suggests using a ‘deferred accounting system’. That would permit duties to be paid, say, every three months, rather than when goods arrive in NI. The clever bit about this is that the deferred accounting could be bundled in with VAT to create an incentive for cooperation. To quote the CER: ‘While goods will be liable for tariff payments if they are re-exported to the EU from NI, they will also be eligible for a UK VAT refund. Enforcement could be … via risk-based and randomised audits.’
What about the big one, agriculture?
Agrifood makes up a huge proportion of the goods that move between GB and NI. There are already some checks carried out – on live animals entering NI, for example. Minimising additional red tape is possible, but it will involve negotiations and, quite possibly, the UK agreeing to stick to EU food hygiene rules. The EU already has an agreement on food hygiene with New Zealand which cuts paperwork, and Switzerland has a deal that negates the need for any additional bureaucracy. So it is feasible … but the question is, would playing by EU hygiene rules take a wrecking ball to trade deals with countries such as the US? The CER also has a list of suggestions that could help cut paperwork, particularly at the border.
Is it all about the rules?
Not exactly. The new set-up will be complicated, and involve countless agencies – analysts, surveillance, customs, logistics, vets, police and so on. Oh, and businesses too. Getting all these groups to work effectively together, from the word go, is quite a challenge but the human element will make a huge difference if everyone trusts everyone else, and cooperates freely, on both sides of the border.
Time to practice?
Yes, preparation time is essential. Roles have to be identified, teams recruited and trained, multiple agencies slotted together like some nightmarish Christmas cracker puzzle. Covid-19 has kicked the clock over for pretty much everyone, and it may be that the most useful thing that could happen is an extension to the 31st December deadline for ending Britain’s transition out of the EU. Imagine having to deal with the fallout from repeat waves of coronavirus, plus the challenges of exiting Europe finally during the Christmas holidays … and then factor in the living hell of doing all this while trying to make the new Irish border function properly.
It’s rather a lot to cram in before the Christmas break. Northern Ireland is still in lockdown. Europe is devoting its energies to Covid-19. Our Government has rather a lot on its plate too. This stuff is complicated and takes time to set up, never mind hone. There are a lot of ways we can make things run smoothly, but they’re not overnight fixes. And it’s a giant experiment. Like Schrödinger’s cat, the whole thing is both alive and dead right up until the button is pushed – let’s hope there is time to do this properly.
By Alice Antoine-Gregoire
Best for Britain's External Affairs Officer
Follow Best for Britain on Twitter at @BestforBritain