The negotiations between the UK and the EU seem to have met an impasse over the Northern Ireland (NI) and Republic of Ireland (RoI) border.

The EU negotiator states that he is concerned about the effect of the border agreement on the “Good Friday” agreement and a possible resumption of the troubles of the last century.  A resumption of the the last century’s troubles would have a most profound effect on Anglo-Irish relations, especially with the present questioning of s British Army personal about their actions in last century’s troubles.

There are six options:

Option 1 would require the UK to be in the Union’s customs union with no ability to have any influence on the levels of duties that would apply,

Option 2, an EU/RoI favourite would mean a customs border between the UK and NI as well as between the UK and the RoI.

Option 3 would see the UK applying the same import duties for goods entering the UK as for goods entering the EU.  All import duties would be retained by the UK.

Option 4 would see the RoI leaving the EU and possibly becoming a member of a yet to be established Sterling Area, it would be expected that the membership would cease after several years.

Option 5 would see no import duties between the UK and the RoI, import duties would be charged for EU goods entering the UK.

Option 6 is basically a hard border with trade under World Trade Organisation rules.

My preferred option would be option 5 with zero tariffs on trade between NI and the RoI. The EU import tariffs would be the same as the tarries agreed between the UK and the EU

Option 4 was suggested as a counter balance of the EU wanting to split up the UK.  If the EU can consider the separation of NI from the UK it has to accept the separation of the RoI from the EU. This option does have some merit for a country that might want to voluntary leave the EU.   There is merit for the UK and possibly for the RoI.

Option 1 and two are not acceptable.

Option 6 is a trade under WTO regulations.  The RoI might prefer option 4 to this option.

Any customs agreement will require UK access to the Union’s internal market and should be limited to about two years.  Option 5 could be time limited to say 15 years with the option to extend the agreement.

The access to the single market has yet to be discussed.  Being a member of, or following, the Customs Union should give automatic tariff free access to the EU internal market.  A demand by the EU for a financial contribution to the EU coffers should be rejected unless the EU makes a contribution to the UK coffers.  The financial contribution should be based directly on the value of the goods sold. I will let the Remainers state whether or not the EU would gain by this proposal as they think that the UK profits from the UK/EU trade.

According to EU statistics, exports in 2017 from the RoI to the UK total represents 13% of the RoI’s total exports and 29% of the RoI’s imports are from the UK.  Of the UK’s exports 6% goes to the RoI, 38.3% to the remaining EU countries and 55.7% to the rest of the world. Imports from Ireland are not greater than 5%. The whole of the EU (including RoI) internal imports is 53.3% of the total, leaving 46,7% from the rest of the world.  These statistics for the British trade are from a Commons Library Briefing dated 1st May 2018, CBP-7851-2.

The Briefing also stated that there was a general increase in the UK trade deficit with the EU from 2006 to 2016.  Another interesting fact is a trade in goods with a deficit of £96 billion was reduced by a profit on “services” with the EU of £14 billion.  The trade deficit is basically subsidising the EU.

Commons Briefing paper, CBP-8173, shows that the RoI exported £2,368 million of goods to Northern Ireland whilst importing £1,945 million of goods.  These figures are 14% of UK exports to the RoI and 15% of goods imported from the RoI,

The RoI exports 12.3% of its goods to the UK,  the export of 1.6% of goods to NI is included in the exports to the UK.  52% of the RoI’s exports are to the EU – Euro 5,819 million. There were Euro 4,562 million of imports from the EU (64%).  These figures are from Ireland’s Central Statistics Office.

There is a demand for a second referendum on EU membership, the 2016 referendum was the actually the second referendum as the first was in 1975.  The first referendum was about the Common Market (now the EU), where the emphasis was on internal trade. Another (third referendum) must be a single issue referendum,  The referendum should be about accepting or rejecting one of the two options in the “EU Article 50”, that is “should the UK leave with an agreement or leave without an agreement”.  A referendum to rejoin the EU should only be held after the UK has left the EU.

The fact that the UK is leaving the EU is highlighting the deficiencies with UK democracy. There have been two “leave” referenda and there have been no referenda regarding joining the EEC or changes to the treaties that changed the terms of membership of the UK with the then EEC and now the EU.

 

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