It’s time to stop doom-mongering over the Irish border – the solutions are already out there

It’s time to stop doom-mongering over the Irish border – the solutions are already out there

It has been a mystifying spectacle to witness the fresh wave of doom-mongering over the future of the Irish border and the Good Friday Agreement in the wake of Downing Street’s fresh confirmation on Sunday night that the UK would not be remaining either in ‘the’ or ‘a’ customs union with the EU after Brexit.

Given that this has been stated Government policy for the past year, with minister after minister (and indeed the Prime Minister) having spent the last twelve months speaking about life after Britain leaves the customs union, it is curious indeed that now is the moment that a range of commentators and politicians have chosen to launch a fresh assault on the idea of leaving the customs union on the grounds that it will emperil the peace process in Northern Ireland.

Now that the customs union bandwagon – set in motion by the CBI three weeks ago before receiving a huge burst of extra momentum from the leaked Treasury forecasts last week – has ended its rambunctious charge towards Downing Street in a ditch a few hundred yards down Whitehall, for the time being at least, it would be a good time for supercilious grandstanding to cease and serious thought on solutions to the border issue to take its place.

Nor is a new customs union a panacea in any case. Anyone who argues that a Turkey-style customs union arrangement is a silver bullet to solve the problem has clearly not crossed the Bulgaria-Turkey land border themselves – the main border crossing at Kapıkule is a sprawling complex of checkpoints and inspection facilities (complete with its own giant duty-free shopping centre) covering 3 million square feet which can take hours to cross at the best of times.

A well-placed source confirmed to BrexitCentral today that the main approach under discussion at Wednesday’s meeting of the inner Brexit cabinet centred around the Treasury’s ‘new customs partnership’ idea as outlined in August as a potential solution to the problem. This plan to create two parallel customs systems in the UK with a complicated backpayments scheme was widely panned by both Remainers and Leavers at the time, with Ian Dunt labelling it an “absolute dog’s breakfast” while Martin Howe QC described it as “both entirely unworkable, and highly undesirable even if it could be made to work.”

Leaving this fanciful proposal aside, the basics of the situation have been clear for some time. The UK is leaving the EU Customs Union. The UK has committed to not erecting a hard border on the island of Ireland, while the Republic of Ireland Government has done the same. Meanwhile the EU has also said that it wants to avoid a hard border, but only with the proviso that it does not undermine the “integrity of the internal market and Customs Union”.

Misleading statistics abound about Northern Ireland’s trading relationship with the Republic and the rest of the EU. The oft-quoted statistic that 37% (£3.3bn p.a.) of Northern Ireland’s ‘exports’ go to the Republic of Ireland has been used in an attempt to justify the creation of a customs border in the Irish Sea. This figure is disingenuous as it completely excludes the £13.8bn of Northern Irish sales to the rest of the UK – more than four times as much as what NI sells to the Republic.

Using a metric which sets the percentage of Northern Irish exports to the rest of the UK at 0% is uninformative at best and deceptive at worst. Considering the complete picture of NI external sales, we find that 60.3% goes to the rest of the UK, while only 14.7% goes to the ROI. Hence it would not be in Northern Ireland’s economic interests at all to prioritise access to the Republic over access to Great Britain, quite apart from the severe political ramifications this would have.

It is not clear that Northern Ireland’s broader economic interests would be served by retaining closer alignment with the EU in any case as, excluding the Republic, only 8.4% of Northern Ireland’s total exports goes to the remaining EU26, compared to 16.6% which goes to the rest of the world. If Northern Ireland alone were to remain in a customs union with the EU, this would prevent it from benefitting from future trading arrangements put in place by the rest of the UK after Brexit. Prioritising the 23% of Northern Irish trade with the EU (including the Republic of Ireland) over the 77% with Great Britain and the rest of the world would clearly be a mistake.

So given that a customs union is off the table, what can we expect the Irish border to look like after Brexit?

For people crossing the border, there should be no change. All sides in the negotiations are in agreement that the Common Travel Area – which predates UK and Irish EU membership by over 50 years –  will continue unaffected, as well the ability for people born in Northern Ireland to choose British or Irish citizenship, or both

Some people have claimed that Northern Ireland would suddenly become a back door for illegal immigration to the UK, but this is a complete red herring. If anyone was intending to stay in the UK illegally, they could simply do it by entering the UK directly and overstaying their visa, rather than taking the convoluted route of entering via Ireland. And in any case, Ireland and the UK already have differential visa policies – for instance, South Africans can enter Ireland visa-free but are required to complete a full visa application for the UK.

As the Republic of Ireland is not part of the Schengen Area, however, this does leave the possibility open for a bilateral agreement between the UK and Ireland to implement some form of delegated visa controls. In any case, Government officials have indicated that the UK is likely to seek a liberal visa arrangement with the EU after Brexit which has few restrictions on short-term EU visitors entering the UK, with controls likely to centre around restricting access to the labour market and social security rather than enforcement at the border itself.

For goods, the situation is more complicated, and this is where the most attention is rightly being focused. But while no-one has yet claimed to come up with a complete solution, a number of practical approaches have been identified which offer the best possible avenues towards a solution which keeps the border as open and invisible as possible.

For instance, the UK Government’s position paper of August 2017 on the Irish border discussed several possible approaches to avoid physical infrastructure at the border. For small and medium sized businesses – up to a size of 250 employees – the UK proposed a customs waiver. Small, medium and micro-sized businesses account for around 80% of cross-border trade and primarily trade in local markets alone. Applying a waiver to these businesses would allow small-scale cross-border business to continue unimpeded while having a minimal effect on the integrity of the UK and EU’s customs borders respectively.

For large businesses, the UK has proposed that compliance checks should principally be carried out electronically, and where physical spot checks are needed, they should be done remotely, away from the border itself. This would involve an expansion of existing schemes, such as the AEO (Authorised Economic Operator) scheme and other so-called “trusted trader” schemes. Cross-border shipments would be declared and cleared in advance of travel, while any relevant tariffs could be declared on a biannual or annual basis to ensure the bureaucratic burden of compliance was not unduly increased.

False declarations would be sanctioned by civil and criminal measures – as would happen with any other general instances of fraud. Large companies are not simply going to start flaunting customs regulations left, right and centre because physical checks are not carried out at the border. For comparison, over 10 million self-assessment tax returns are completed every year in the UK without the Government standing over people’s shoulders as they fill them in, and this does not lead to vast swathes of non-compliance.

The Twitterati’s knee-jerk response is generally to dismiss any proposals produced by the Government out of hand as unrealistic, pie-in-the-sky proposals, unless of course they happen to be in support of continuing close alignment with the EU, in which case they are welcomed with open arms, as evidenced by the response to the Treasury leak last week.

So let us see what another report had to say on the Irish border:

Standards and best practices such as domestic and cross-border coordinated border management as well as trusted trader and trusted traveller programs can significantly reduce compliance requirements and make borders almost friction free. Customs and other border control practices that keep the border open, such as release before clearance, deferred duty payments and clearance away from the border, also help keep the border free of traffic and speed up or even remove the need for processing.

Technologies such as automatic number plate recognition, enhanced driver s licenses, barcode scanning and the use of smartphone apps can also have a significant impact by reducing paperwork and allowing pre- or on-arrival release, which can reduce or even eliminate the need to stop or undergo checks.

No, this isn’t from the Legatum Institute’s excellent report Mutual Interest: How the UK and EU can resolve the Irish border issue after Brexit (or accompanying technical note and legal paper) although it does look at many similar solutions. Legatum have seemingly now too been deemed personae non gratae by the Remainer press, who have largely resorted to ad hominem attacks on the think tank rather than trying to engage with their arguments.

In fact it is from a report commissioned and published by none other than the European Parliament – hardly a hotbed of optimistic post-Brexit thought – entitled Smart Border 2.0: Avoiding a hard border on the island of Ireland for Customs control and the free movement of persons.

And crucially, the report says that its findings are applicable regardless of the outcome of the Brexit negotiations – they would work whether or not the UK remains in the single market and Customs Union, negotiates a comprehensive free trade agreement, or even moves onto trading on WTO terms with the EU:

The solution presented here can also be implemented regardless of the legal framework for the UK’s exit from the EU; therefore, the implementation can commence and the solution can be ready to operate with a minimum transition period. In addition, it is also scalable and presents a potential future model for the future movement of persons and goods between the EU and the UK.

The specific solutions proposed to “create a low-friction border for the movement of goods” by the report are:

  • A bilateral EU-UK agreement regulating an advanced Customs cooperation that avoids duplication and where UK and Irish Customs can undertake inspections on behalf of each other;
  • Mutual recognition of Authorized Economic Operators (AEO);
  • A Customs-to-Customs technical agreement on exchange of risk data;
  • Pre-registration of operators (AEO) and people (Commercial Travellers programme in combination with a Certified Taxable Person programme);
  • Identification system by the border;
  • A Single Window with one-stop-shop-elements;
  • A Unique Consignment reference number (UCR);
  • A simplified Customs declaration system (100% electronic) with re-use of export data for imports;
  • Mobile Control and Inspection Units;
  • Technical surveillance of border (CCTV, ANPR etc)

This is very much in line with what the UK proposed back in August, making the assorted claims from the commentariat that no potential solutions exist all the more baffling, given the high level of common ground that already exists between the UK’s proposals and the solutions offered by the European Parliament report.

It should be noted that the report only describes a low friction border, not an entirely frictionless border, calling as it does for the installation of CCTV and ANPR (automatic number plate recognition) cameras. It also suggests that ‘smart gates’ might be needed, which would open automatically to allow traffic through. ANPR cameras might just be politically acceptable at a push, although even these would be controversial and potentially not needed in any case. Physical gates, however ‘smart’, would certainly not be acceptable, but nor should they be necessary either, for reasons discussed below.

And it should also be noted that this is not the official viewpoint of the European Parliament – not that it even has one, unless the opinions of Guy Verhofstadt are taken as representative of all 751 MEPs, which would not be a prospect likely to thrill many of them. The report itself was commissioned by a parliamentary committee from an independent customs expert – the former Director of the World Customs Organization.

But the fundamental point to take away from the report is not that it is a finished solution, but that solutions are indeed possible and this is the right area to be looking for them in. There is a wealth of expertise and insight out there on all sides of the Brexit debate, but too much of it is being wasted by people jumping up and down and shouting “it’s impossible” rather than trying to engage with the most promising avenues towards a workable solution.

Ultimately, coming up with a workable solution to the problem requires the British and Irish governments – and more importantly, the EU – to accept that there is a balance to be struck between the small increase in the risk of non-compliance and the imperative to keep the border as open and invisible.

The idea that an open border would entail a drastic relaxation in either the UK’s or the Republic of Ireland’s customs controls is another red herring. According to the World Bank LPI 2016, the proportion of imports which are physically inspected at the UK border is incredibly low at 4%, and for the Republic of Ireland it is even lower at 1%.

Moving to a system where physical spot-checks continue to take place but away from the border itself is not a drastic change from a customs regime where 99% of goods are not physically inspected at the border anyway. It is clear that any potential downsides of taking a slightly more relaxed approach towards enforcement are significantly outweighed by the advantages of ensuring that the border does not become a hindrance to free movement across the island of Ireland.

The UK has been clear that they will not put up a hard border. Similarly the Republic has indicated that it has no desire to put up physical border controls. Irish Foreign Minister Simon Coveney in fact welcomed the UK’s proposals when they were first put forward, saying that Ireland “agreed with the vast majority of them”, describing the proposals as “aspirational” and reflecting “a lot of the language that the Irish government has been using” and reiterating that “what we want is an invisible border, which is what we have at the moment”, even though the rhetoric from the Irish Government has hardened since November, not least because Taoiseach Leo Varadkar has clocked that he gets a nice bounce in the opinion polls following each outburst towards London. (RTÉ’s Tony Connelly revealed the inside story on how and why Ireland suddenly raised the stakes last year.)

The Irish Government will quite understandably push a hard line on the border in the negotiations, but the likelihood of Ireland actually putting a hard border up themselves is minimal, regardless of the outcome of the negotiations, unless forced to do so under duress by the EU. This ultimately leaves the European Commission as the only substantial risk factor in the way of some form of open border solution. The Commission must think carefully about what they prioritise.

To put concerns over a marginal increase in possible non-compliance ahead of an issue of genuine human concern – keeping the border smooth and open – would be a clear mistake. Once the EU accepts this, it should be well within the capabilities of both sides to come up with a solution for the border which works in the best interests of everyone on both sides of it.