A way can be found between the EU rock and the GB hard place. But will Boris Johnson let us take it?

Katy Hayward

We are literally at sea over what Northern Ireland’s special status with the EU will mean  in practice.   Our Brexit guru – or should I now say, our Guru on Trading Relations with GB and the EU Katy Hayward  writing in the Belfast Telegraph explains neatly why Northern Ireland is between a rock and a hard place   

In  the past  Katy was keen to repeat assurances that  NI’s  different economic  relationship with the EU from GB  had no constitutional significance. But the new Ireland NI/protocol of the new Withdrawal Agreement struck by Boris Johnson has changed all that.

Rather than enjoying a “best of both worlds” scenario, Northern Ireland risks finding itself caught between a rock and a hard place when it comes to the implementation of the Withdrawal Agreement.

It is increasingly the case that people from all backgrounds in Northern Ireland think that Brexit makes Irish unity more likely. In 2016, 18% of unionist respondents thought Brexit made a united Ireland more likely; by 2018 it was 28%. The proportion of nationalists thinking this rose from 38% in 2016 to 64% in 2018.

But there is a big difference between expecting something and welcoming it. By late 2018 (the latest data we have), one-in-three of DUP supporters said Brexit makes them even less in favour of a united Ireland. Unsurprisingly, one-in-two of Sinn Fein supporters said Brexit made them even more in favour of it.

As for the avowedly non-aligned, they are changing. For one thing they are (now) voting, motivated, it seems, by a determination to remain. They are increasingly of the view that Brexit makes a united Ireland more likely. But they are not necessarily in favour of it.

While people in Northern Ireland are increasingly likely to think Brexit makes Irish unity more likely, there’s increasing polarisation in terms of how people view the prospect. In other words, Brexit has made something that people will disagree about profoundly (ie Irish unity) increasingly likely and increasingly consequential.

Our veteran economist John Simpson sees a way through; a variant of the old trusted trader scheme

There would be no trading problems if two features remained unchanged: the UK would agree an extensive free trade deal with the EU, and the UK and EU could agree that the inherited regulatory alignment for trade in goods should be maintained.

Unhappily for ease of administration, there is no promise that these two features will be maintained.

If there is no free trade deal between the UK and EU, then there may be customs duties, both ways, for businesses to pay.

Faced with the need to have documentary evidence of trade flows between GB, NI and RoI, the various customs authorities should now be devising a simplified paper trail to minimise any extra costs.

One option would be for the customs authorities, by agreement, to avoid unnecessary paperwork for businesses which register as an ‘authorised economic operator’ and which have permission to move goods, which would not attract duty, on an open basis – in other words, there would be an honest trader assumption, subject only to occasional unplanned inspections at the ports.

There is a concern that the maintenance of regulatory alignment between the UK and EU will be challenged because of emerging differences.

The EU may insist on strict technical alignment whilst the UK is expected to suggest that, with a degree of flexibility, any trade deal should rely on ‘mutual recognition’ clauses. During 2020, the differences in language usage are set to create a new dimension for the post-Brexit scene.

With goodwill, Northern Ireland should be able to argue for special arrangements giving the best of both worlds.

But is goodwill present? The problem is that all easing moves  seem flatly  rejected by Boris Johnson in an approach to the next stage of negotiations  announced yesterday with fanfare but no detail:

Mr Johnson’s fundamental message to the EU is that Britain wants a free trade agreement (FTA) with no tariffs, fees, charges or quotas on goods flowing in either direction.

But he will not sign up to so-called regulatory alignment, in which Britain would have to follow the EU’s lead on standards. 

Mr Johnson said: “There is no need for a free trade agreement to involve accepting EU rules on competition policy, subsidies, social protection, the environment, or anything similar any more than the EU should be obliged to accept UK rules. 

We will not engage in some cut-throat race to the bottom. We are not leaving the EU to undermine European standards, we will not engage in any kind of dumping whether commercial, or social, or environmental.”

So looking at it with heroic optimism the UK will do better than align with EU standards, it will exceed them. No mention here though of how to satisfy Northern Ireland’s need for foreign labour in the tourist industry.  And fishing? Let’s not go there today.