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After suggestions this week that there could be a sea border around the island of Ireland, Open Europe argues that it is difficult to imagine an alternative to some form of border on the island of Ireland, but that this should be kept to the bare minimum through the implementation of a ‘light-touch’ border.
According to The Times, Irish Taoiseach Leo Varadkar advocates the creation of a sea border around the island of Ireland in order to avoid the imposition of a land border for goods between Northern Ireland and the Republic of Ireland. This would mean establishing customs controls at the external border of the island of Ireland, at all ports and airports. Goods would be customs-cleared on entry to the island and then be in free circulation around the whole of the EU.
In our report Nothing to declare: a plan for UK-EU trade outside the customs union, Open Europe considered this solution but argued that, while it would negate the need for a hard border or any internal customs checks, it would not be politically practical as it would create an internal border within the UK.
These tensions have been evidenced this week by the comments of the chief whip of the Northern Irish Democratic Unionist Party (DUP), Sir Jeffery Donaldson, who said, “There is no way that the DUP would go for an option that creates a border between one part of the United Kingdom and the other…Dublin really needs to understand that that proposition is absurd and unconstitutional.” The plan would require that the EU gives special recognition for Northern Island, which would threaten the cohesion of the UK, and could be seen by unionists as a first step towards a united Ireland. It is not just the DUP who would find this unacceptable, but unionists across the UK. Special recognition for Northern Ireland would also create tensions in Scotland, where the SNP have long called for special dispensation to remain part of the single market.
The other idea that has been floated since the referendum would be to locate the sea border around the external perimeter of the British Isles. However, this would also be deeply problematic politically for the Republic. It would require the EU to consent to Ireland adopting parallel customs arrangements with the UK, and in essence dislocate the Republic from the EU’s customs union. Ireland has rejected any change to its relationship with the EU as a result of Brexit, and the EU has outlined its opposition to ‘cherry picking’. Therefore is likely to be as politically unpalatable as a sea border within the UK.
Irish concerns about a border for goods on the island of Ireland are understandable considering the history on the island. However, if the underlying intention is to protect the peace process, as stated, displacing the border (be it to the perimeter of the British Isles or to the Irish Sea) would not achieve this. Instead, either suggestion would cause significant tension in Northern Ireland, and would threaten to undermine the stability of the current political situation.
Due to the political difficulties of these options, Open Europe has instead argued that it is difficult to imagine an alternative to some form of border on the island of Ireland. But this should and can be kept to the bare minimum, through the implementation of as light-touch a border as possible.
It is worth noting from the start that the free movement of people would not be affected by the implementation of any form of customs border. Free passage for citizens between the UK and Ireland is currently protected by the EU’s free movement of people, but also by a separate bilateral agreement for a UK-Ireland Common Travel Area (CTA) which has been in place since 1923, long before either party joined the EU. The CTA also includes the non-EU territories of the Isle of Man and the Channel Islands, so while EU free movement may end, the operation of the CTA should not be disrupted by the UK’s withdrawal. Notably, the EU has offered assurances that protocol 20 of the Treaty on the Functioning of the European Union, which enshrines the CTA in EU law, will remain in place post-Brexit.
Open Europe’s proposal aims to avoid the need for customs checkpoints or any other infrastructure at the border. However, it would not remove the need for customs controls entirely. Instead, most customs checks could take place before or after the border, via pre-departure electronic clearance of goods, and post-arrival audit checks. The most developed model of a virtual border is between Norway and Sweden, where there are only ten customs checkpoints, jointly operated by Norwegian and Swedish authorities. On this border, customs procedures are only required for commercial vehicles, and security is ensured through a control zone with a 15km radius either side of the border, allowing both authorities to carry out spot checks either side of the border.
The UK and Ireland should aim for a more ambitious arrangement, where there are no customs checkpoints, and the current invisibility of the border is maintained to the greatest extent possible. Open Europe argues that this can be done through electronic clearance systems, wide use of ‘trusted trader’ accreditation, and significant bilateral cooperation.
1) Pre-clear substantially all bilateral trade: The UK and Ireland should aim to electronically clear almost all trade in goods before they are shipped. These pre-cleared goods could then be transported across the border without being required to stop. This is not an unrealistic aim, given HMRC already receives 99% of customs applications electronically and successfully clears 96% of these within seconds. Currently, only the remaining 4% is required to undergo documentary assessment at the border.
2) Establish a bilateral agreement mutually to recognise UK and EU Authorised Economic Operator (AEO) accreditation: AEO is an internationally-recognised status awarded to traders that indicate security of supply chain and conformity with customs rules and procedures. In many cases, it allows approved traders to submit customs documentation as periodic self-assessments, and pay customs duties in arrears rather than shipment by shipment, thus reducing the burden at the border. In the EU, while AEO is a regional accreditation, it is approved and awarded at member state level. Once the UK leaves it should establish its own national AEO framework, with an eye quickly to agreeing mutual recognition of AEO traders with the EU. This would allow all accredited traders moving goods between the UK and Ireland to benefit from accelerated border clearance procedures. If a significant share of UK and Irish traders took up this accreditation, it would significantly reduce the need for a physical border. However, while the EU has agreed AEO mutual recognition deals with a number of countries, (including the US, Norway, Switzerland, Japan and China), these deals rest on the understanding that traders adhere to equally strict product standards and regulation. If the UK significantly diverges from the EU on food product standards, for instance, agreeing this simplified method of cross-border trade would prove difficult.
3) Move checks on non-cleared vehicles away from the border: For those goods which fail an electronic pre-clearance procedure, there will of course need to be inspections. However, these inspections of non-cleared vehicles should take place away from the border, at specially designed inspection zones. This would allow necessary checks to take place on high-risk consignments without the need for checkpoints and customs officials at the border. In the long term, technology such as electronic customs ID cards and Radio-Frequency Identification screening can fast track movement through these zones.
4) Conduct random spot checks away from the border, but only in the territory of the respective authority: A virtual border would need to address border security, namely how to ensure non-cleared vehicles attend inspection sites. As well as randomised audits of importers, the UK and Ireland should follow the Norway-Sweden model of spot checks away from the border. However, clearly having UK border authorities operating in the Republic of Ireland would be politically unviable, so the UK and Ireland should agree to conduct spot-checks in their own territory.
5) Require no checks on private vehicles: There should be no customs procedures for the transit of private vehicles and citizens across the border, thus preserving the invisibility of the border for the 1.85 million cars which cross the border monthly.
6) Harmonise UK and Irish electronic customs systems: The UK and Ireland should cooperate to ensure the earliest possible harmonisation of respective electronic customs systems. This would create a customs database which is broadly interoperable, allowing Ireland to share data submitted by an exporter with the UK customs system for automatic submission of the importer declaration (and vice versa).
7) Promote long-term cooperation and investment: Management of the system will require long term cooperation from both parties, and as such parties should strive to create a UK-Ireland Border Working Group, which would serve as a forum to manage the shared border, evaluate progress on shared initiatives, and identify areas for further improvement. This should involve the UK government, the Irish government and the Northern Irish Executive.
Much of the discussion has been about the viability of technology on the border; what Open Europe suggests is in fact the opposite – using technology as far from the border as possible. We recognise that solving the issue of the Irish border will be far from simple, and that there will always be some leakage of goods across the border. The solution does not have to rule this out in its entirety; tobacco smuggling at the Irish border already costs the UK an estimated £1-3bn annually in lost excise duty.
But the question of the Irish border is one that needs to be solved. Varadkar has commented, “As far as this Government is concerned there shouldn’t be an economic border. We don’t want one.” This is not a solution to the problem. We believe that the alternative, displacing the border either to the Irish Sea or the perimeter of the British Isles, would not protect the continuation of the peace process in Northern Ireland, and should therefore not be under consideration. Furthermore, the level of support for Brexit in Northern Ireland is not insignificant: the Brexit-supporting DUP gained seats in the recent Westminster election, and 46% of the Northern Irish electorate voted to leave last summer. We recognise that our proposals do not provide a means to maintain, in its entirety, the current “invisible” border operation on the island of Ireland, and that the psychological adjustment to a new, more administrative means of cross-border trade between the UK and Northern Ireland should not be underestimated – even if the presence of a physical border is avoided. But we believe it represents the best solution to a difficult problem. All focus should be on how to ease the presence of this internal border through creative means.