7 January 2019

The truth is we just don’t know what will happen on the Irish border


I’m going to admit something. I think it is something to which plenty of other people — in fact, most people in Westminster — would admit to if were they being honest.

If in 81 days the United Kingdom leaves the European Union without a deal, I have little in the way of certainty about what happens on the border between the Republic of Ireland and Northern Ireland.

My instinct is that very little will happen on day one. The days before any no deal scenario would be chaotic and a media frenzy. The gazebo threat level in Westminster would reach an unprecedented triple decker. But what about on March 30th?

Well, frankly, there have been no preparations by the British, the Irish, or any third party groups, to enforce a border on the isle of Ireland. And so, on the first day after Britain has left the EU, there’s very little reason to suggest that anything would be different. I expect that news reports will be filled with cars and lorries driving across the border with absolutely nothing stopping them. If a zealous Garda or PSNI officer stops hauliers and says their licences or haulage permits aren’t valid I’d expect short shrift from politicians (although I don’t rule idiocy out). I expect there will be people on TV standing near the Irish border telling reporters: “I don’t know what all the fuss was about.”

But such a state of affairs would not necessarily last, and that’s the danger of no deal on the Irish border.

If I think that, why do I say that I don’t know what will happen? Because there is so much conflicting news from every single side.

In November, Irish Taoiseach Leo Varadkar said his government would find it very difficult to avoid imposing a hard border on Northern Ireland if Britain crashes out of the European Union without an exit agreement. Then in December he said that he’s not planning for a border at all, and that his government would not be making any.

He has previously said that the United Kingdom would have to implement a hard border due to the rules of the World Trade Organisation. The UK has said it won’t implement a hard border, but then Philip Hammond in October said that the United Kingdom would have to. In Parliament in October, Theresa May herself said that the UK was committed to no hard border in any circumstances, including no deal.

Jean-Claude Juncker, the EU Commission President, promised to the Irish Parliament that no hard border would follow, even in the event of no deal. But then Merkel ally Joachim Pfeiffer reminded EU officials that Ireland’s ascension to EU rules means it has signed up to regulatory checks and collection of tariffs with any third party state — warning that no deal means Ireland is facing the hardest possible border arrangements in Europe (or the hardest possible sanction for non-enforcement). So we’re left with the question of how much political promises mean against the reality of treaty law.

And last week we learnt that 1,000 extra police have been ordered to be sent to Northern Ireland to reinforce the PSNI for any disorder arising from a Hard Brexit and a hard border.

So, will there be one? Well, the World Trade Organisation doesn’t seem to think so. In fact, the WTO would only be involved in the event that there is a dispute between one of its 164 member countries (including the EU). In other words, it would require either the UK or the EU or a third country to bring a case of dispute to the WTO arising from a lack of a border between Northern Ireland and the Republic.

If that dispute did come up, brought up by either the UK or the EU or a third party of either, then it would require either the UK or the EU to implement a hard border, or face sanction.

As Peter Ungphakorn has pointed out before, the commonly held belief that Ireland or the UK would go head-to-head with WTO officials in a heroic stand to maintain a soft-border in the event of no-deal, is false. That is not going to happen because that isn’t how WTO disputes work and there isn’t a specific rule requiring governments to secure their borders.

There is though a requirement for non-discrimination between member states where there is no treaty in place — which is, of course, what no deal means.

When the UK leaves it is a third party and countries that export into the EU could dispute with the EU that allowing goods from the UK into the RoI (and rest of the Single Market and Customs Union) without checks could constitute discrimination. And other states could argue that checks to enter GB and Northern Ireland without checks from the Republic could be discriminatory.

And these are quite explicit. The UK adopting the whole of the Community acquis on day one (which is already on its way) means that we’ll still be checking live animals, animal products, agricultural products, and other Rules of Origin requirements, at ports. But we won’t with goods going across the border between Northern Ireland and the Republic. Both the UK and the EU will be easy targets for dispute and other countries probably will not hesitate to take advantage of this.

The World Trade Organisation is relatively agile for an international body. Between 1995 and 2016 it saw 573 requests for consultation and issued over 350 settlement decisions.

Disputes at the WTO are getting slightly protracted though. The time to complete panel proceedings has increased by 50 per cent in recent years—from an average of 13 months (400 days) for panels established in 2010 to an estimated 19.8 months (595 days) for those established in 2013.

I think the the World Bank’s ICSID is the best comparison. The arbitration body has, since 1996, had 572 cases but with average arbitration taking over three and a half years each.

There is no reason to think that a dispute that includes not just Brexit, but also the Good Friday Agreement, not to mention the largest players in global trade, would be easily and quickly sorted at the WTO.

But fundamentally, on day one? I don’t think there would be anything that would change. But that doesn’t mean that it wouldn’t have to change.

And here lies an issue that isn’t going away.

Last week, after two days of schmoozing by Number 10, the DUP repeated their objections to the Withdrawal Agreement and so the chance of No Deal remains.

They and those supporting no deal are taking a two-part gamble. First that the UK will remain committed to free trade in the future, that it would prefer to remove checks on other third-party states in a non-discriminatory manner (it has a good case that standards equivalences are not equal and so checks required on one aren’t equal to another, but this would be tested and vulnerable — and mutual recognition of standards would be even more vulnerable to challenge to those countries with which we then don’t have treaty-defined mutual recognition).

Second, that the EU will continue to hold to the promises of Commission officials and the EU Council’s political promise to see no border in Ireland as preferential to removing barriers to third party countries in the event of a dispute between third party countries and itself. Its current acquis requires member states to perform checks and collect tariffs and so the bargain is, in effect, that the EU will choose politics over its treaties.

But on day one, I don’t think this has much of an impact on the Irish Border. I should stress that I’m distinguishing Ireland from problems at Britain’s ports, just in time supply chains, rules on flights etc. No deal will have very real implications. They will be drawn out and ambiguous.

What happens on the Irish border has a real cost in terms of investment as well as bigger political questions both for the EU and the UK. If it means barriers brought down wholesale, that might be good, but it could mean one side or the other blinking and implementing that which they have previously said they won’t: a border and checks.

All of this aside, there are three options left open: no Brexit (which brings its own complications and costs), the Prime Minister’s Deal (which has the benefit of being real, written and on the table), and No Deal (which remains the default option).

After two years of obfuscation on trade-offs and costs, it’s time for all sides to come clean about the costs of their options. And for more of us to be honest about just how much uncertainty the process entails.

Matt Kilcoyne is Head of Communications at the Adam Smith Institute.