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11 August 2017

How to solve the trade and migration issues relating to the Irish border

by Marcus Fysh MP

Originally published by Brexit Central.

The recent comments made by Irish Taoiseach, Leo Varadkar, regarding the Brexit negotiations were reported negatively by the UK media – but I think they showed a little inexperience and lack of creative thinking from the EU side rather than malice.

The Taoiseach’s suggestions that the UK should seek to remain in the European Economic Area (EEA) and the EU’s own Customs Union are not the right solution. It is understandable they might appear attractive at first glance to those concerned primarily with trade on existing models and easing cross-border activity, and particularly to some in the European Commission who mistakenly appear more interested in talking about divorce bills than the substance of ongoing relationships which hold greater long-term import and opportunity for both sides.

However, the fact is that applying to remain within the EEA or Customs Union – even on an interim basis – would prolong uncertainty; not deal with key issues of change in control of money, borders and laws indicated by our EU referendum; and distract from the main negotiation of post-EU arrangements between the UK and EU.

The first things that need to be agreed in respect of the Northern Irish border are what will happen with trade and migration.

Trade in goods and customs co-operation with the EU are things I have previously written about elsewhere: the importance of freely moving consignments at the border itself – but with enhanced pre-declaration at source and confirmation at destination – and of inspection and assessment to ensure confidence in the system on both sides of the border. This is the same principle as needs to be applied at other trans-shipment points across the English Channel and by air.

Almost nowhere in the world now has checks of goods at the border itself, and these are being eliminated worldwide by the WTO trade facilitation agreement to which many countries are now signed up. Canada and the US are not part of a customs union together but have integrated supply chains that work fine with multiple trans-shipments, for example in the automotive industry, and common transit conventions can smooth trade for the EU and UK too.

The revolution in efficiency of global shipping brought about by containerisation reduced the need for multiple loading and handling and replaced it with standardised container pick-up, set-down and movement through borders without stopping at the border itself. This means that most global trade is containerised and shipped through ports and borders efficiently.

In the Irish trade context the effect of this is that most trade is containerised and shipped with free choice between Irish and Northern Irish ports. 90% of it is shipped by “Roll-On-Roll-Off” Heavy Goods Vehicles using the UK’s mainland port and road infrastructure and much shipped onward via this “land bridge” to northern European distribution centres in France, Belgium, Holland and Germany.

Pre-declaration at source, destination confirmation and randomised inspection are already features of this trade in many areas. At the moment, these level-of-service considerations and the efficient cost of the transport itself via the UK land bridge – contrasted with the large capital investment and other barriers there would be to alternative modes of shipping – mean that Irish exporters overwhelmingly favour the UK land bridge to facilitate their trade.

Pharmaceutical, human biological and food and animal products, particularly meat and dairy, make up a large proportion of Ireland’s exports to the UK. These, in particular, are industries where there is a large degree of EU regulation with respect to inspection, as well as very significant potential tariffs should the EU not be willing to accept the UK’s offer of continued zero tariff preferential trade, to the point where there would be substantial shift of business away from Ireland, for example in meat processing.

With respect to air cargo, one third of cargo movement by air takes place in cargo holds of passenger flights, but the whole air cargo sector looks set for extra security inspection because of of terror plots against aircraft with materials sourced in Europe and shipped elsewhere by air. This is otherwise not an easy substitute for the transporting of most products at scale, in respect of Irish trade as well as the bulk of the rest of EU trade.

Schengen Information System comparison and verification of cargo manifests are already an increasing fact of life for Irish and British ports and their interfaces with the Schengen Area customs authorities, since neither Ireland nor the UK are part of the Schengen area of Europe within which border controls have been abolished. Heightened monitoring of dangerous or illegal goods is a major feature of new Schengen external border rules.

It therefore makes eminent sense in this context for the Irish Government to work with the UK to do whatever it takes in terms of systems upgrades to be able to monitor goods movements large and small, and to push for full customs co-operation, a common transit convention, VAT netting and zero tariffs, as part of an early framework for free trade between the EU and UK. This would keep trade between Ireland and the UK similar to what it is now, and give confidence that there is a robust process for managing potential divergence of standards.

In terms of migration, many British and Irish holiday-makers exiting the Schengen Area from Spain, Portugal and France have already experienced queues this summer. Nothing to do with Brexit, these instead came about because of extra security procedures for the external border of the Schengen borderless travel area in Europe. They do also show, though, how important it is in the modern world for borders to be adequately equipped with effective computer systems and trained personnel who are not on strike, to be able to match passport data quickly and ensure luggage is checked efficiently.

Exchange of people is important to services trade – and not just tourism – for people working either side of the UK-Irish border. Similar cross-border working patterns such as between Gibraltar and Spain, and to a lesser extent the nations across the English Channel, need to be considered at the same time as arrangements for the UK and Ireland.

The issue of the integrity of the Schengen Area for security and movement of people affects Ireland and the UK in similar ways, since neither are parties to the Schengen Agreement. Passports are checked and compared with the Schengen Information System whether arriving into the Schengen Area from Ireland or the UK. Passport information is also already required by most sea and air carriers between the UK and the island of Ireland, for security purposes, so this data is already technically available.

Since new regulation came into force this year, the Schengen Area has also required passport data comparison with the Schengen Information System on exit from the Schengen Area, as well as on entry. It helps the integrity of that system for passport comparisons of people moving across the Schengen border to be matched with those of people arriving into the UK and Ireland, and departing the UK and Ireland, as established by the UK and Irish governments.

These UK and Irish activities need take place only at the borders of the UK-Irish Common Travel Area rather than at the Northern Irish border with Ireland.

The issues at the border between the UK and Ireland are twofold: for security the system is already there; for immigration there is currently no restriction on Irish and UK nationals.

For the future, it would be sensible for there to be the same freedom of immigration granted to Irish nationals, and for that to be reciprocated with freedom of UK nationals to settle in Ireland, thus preserving the Common Travel Area and frictionless border between the UK and Ireland for Irish and UK nationals.

Given the status quo and benefits for Irish and UK citizens being so similar – of having the Common Travel Area and not being party to Schengen – it makes no sense to change these arrangements for Irish and UK citizens materially, and is possible as long as Ireland remains outside the Schengen Area.

For non-Irish EU citizens with settled status in either country, the same ability to travel and settle within the Common Travel Area could be extended. Should their place of entry and settlement be Ireland or a combination of Ireland and the UK, they might need to show consistency of their relevant immigration record (as collected and shared between the Irish and UK governments) with immigration policy in the UK deeming immigration and residence in Ireland as being equivalent as far as the UK is concerned, for the purpose of gaining rights to settle permanently in the UK.

With wisdom I am sure the Irish and UK governments can find a way to agree on the above frameworks for co-operation in trade and migration, and lead negotiations in a positive wider direction when they resume later this month. I hope great effort will be put into strengthening and sustaining this important bilateral relationship.

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