Read on Twitter
1/Thread on Irish border
It is frequently stated that the reason the UK has to sign up to the Backstop in the WA is because the UK is legally bound both through the Belfast Agreement & Dec 2017 EU/UK progress report to prevent any trade friction on the Island of Ireland.
It is frequently stated that the reason the UK has to sign up to the Backstop in the WA is because the UK is legally bound both through the Belfast Agreement & Dec 2017 EU/UK progress report to prevent any trade friction on the Island of Ireland.
2/I wanted to share some thoughts:
First, lets deal with often quoted argument that the Good Friday Agreement explicitly prohibits any trade friction on the island of Ireland. Here is the Agreement.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/136652/agreement.pdf
First, lets deal with often quoted argument that the Good Friday Agreement explicitly prohibits any trade friction on the island of Ireland. Here is the Agreement.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/136652/agreement.pdf
3/After reading it I find that there are ZERO mentions of the word friction in the document at all & only 1 use of the word trade - as part of the phrase “Trade Union”.
There are, however, 10 uses of the word border in the document.
There are, however, 10 uses of the word border in the document.
4/ 9 are in the phrase “cross-border” and relate specifically to cooperation between the ROI & UK or devolved NI assembly.
1 relates to “a new regional development strategy for NI…tackling the problems of a divided society and social cohesion in urban, rural and border areas…”
1 relates to “a new regional development strategy for NI…tackling the problems of a divided society and social cohesion in urban, rural and border areas…”
5/So, in total there are none, not one, not a single mention of the actual border on the island of Ireland and how it relates to trade in the whole document.
6/Second, lets deal with the issue of friction on the border if the UK leaves the SM & CU. It is argued that any form of Brexit that involves leaving the SM & CU (i.e. what 85% of the UK voted for in the last General Election) will create friction.
7/This is undoubtedly true. Even if we reduce the admin burden to a single additional online form this would represent an increase in friction. But there is already friction across the border between NI & ROI just as there is across the borders between any number of EU members.
8/That is because there are still any no of diffs between the EU28 countries. Diffs in income, capital gains & vat rates e.g. This 120-page document deals only with the different VAT regimes operating in the EU today. Wow that’s some friction!
https://ec.europa.eu/taxation_customs/sites/taxation/files/resources/documents/taxation/vat/how_vat_works/rates/vat_rates_en.pdf
https://ec.europa.eu/taxation_customs/sites/taxation/files/resources/documents/taxation/vat/how_vat_works/rates/vat_rates_en.pdf
9/Only 19/28 EU states share the same currency –an obvious source of trade friction. Thus, there is already trade friction between the ROI & NI. This is reflected by the cross border smuggling today (something not so prevalent across the Welsh/English border for example).
10/Below is a 2015 article from the Irish Times explaining how fuel laundering & tobacco smuggling alone costs the ROI up to €1bn pa. https://www.irishtimes.com/news/ireland/irish-news/fuel-laundering-tobacco-smuggling-costing-1bn-annually-1.2114673
11/So, the Good Friday agreement does not mention the border & there is already trade friction across the border on the island of Ireland so the idea that the UK is breaking a legal treaty in the Belfast Agreement or creating trade friction where none existed are both untruths.
12/What is true, is if you want to remove trade friction entirely then you must align your rules, regulations, currency, language, taxes and laws entirely. 100%. Rather like existed on the island of Ireland up until 1922 & the establishment of the Irish Free State.
13/Alternatively, you can create such alignment through the continued integration of the EU – which is exactly what the EU commission has planned with the creation of a single EU Finance Ministry & harmonised tax rates etc. https://ec.europa.eu/info/business-economy-euro/economic-and-fiscal-policy-coordination/economic-and-monetary-union/deepening-economic-and-monetary-union_en
14/Now to the issue of whether the UK has promised (in a non-legally binding document) to prevent any increase in trade friction on the island of Ireland. Here is the actual December 2017 Joint report
https://ec.europa.eu/commission/sites/beta-political/files/joint_report.pdf
https://ec.europa.eu/commission/sites/beta-political/files/joint_report.pdf
15/How many times is the word friction found in this document? ZERO
What about trade? ZERO
What about trade friction? ZERO
Nope the document does not mention the word friction or discuss the idea of trade friction at all.
What about trade? ZERO
What about trade friction? ZERO
Nope the document does not mention the word friction or discuss the idea of trade friction at all.
16/It does however mention the phrase “hard border” twice:
“The UK..commitment to the avoidance of a hard border, including any physical infrastructure or related checks and controls.”
“The UK remains committed to..its guarantee of avoiding a hard border.
“The UK..commitment to the avoidance of a hard border, including any physical infrastructure or related checks and controls.”
“The UK remains committed to..its guarantee of avoiding a hard border.
17/So, what the UK has actually promised (in a non-legally binding document) is to ensure that there is no HARD BORDER on the island of Ireland and no physical infrastructure or checks and controls AT THE BORDER. Not no trade friction. NO HARD BORDER
18/The Dutch Customs broker Hans Maessen in his testimony to Parliament outlined precisely how this could be achieved using existing EU and UK systems and below how the current Withdrawal Agreement can be adapted to achieve this
http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/northern-ireland-affairs-committee/the-land-border-between-northern-ireland-and-ireland-followup/oral/92519.html
…http://2mbg6fgb1kl380gtk22pbxgw-wpengine.netdna-ssl.com/wp-content/uploads/2018/12/BetterDeal.pdf
http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/northern-ireland-affairs-committee/the-land-border-between-northern-ireland-and-ireland-followup/oral/92519.html
…http://2mbg6fgb1kl380gtk22pbxgw-wpengine.netdna-ssl.com/wp-content/uploads/2018/12/BetterDeal.pdf
19/Some people argue that whilst there's no actual legal or technical requirement for UK to ensure no increase in trade friction in the GFA, there is a moral argument. That the intention of GFA is to allow for increased joint decision making between ROI, the UK & NI assembly.
20/But nothing in the GFA precludes either NI nor ROI making independent decisions which act to increase trade friction eg when ROI joined the ECU, fixed its currency rate in 1998 (after GFA signed), then joined the euro in 2002 giving up the pund/pound link.
21/In 2003 the ROI also reduced its corporate tax rate to 12.5% compared to 30% in NI. And this was just the headline tax rate. Through a number of mechanisms foreign multinationals in the ROI today pay an Effective tax rate (ETR) of under 4% on global profits "shifted" to ROI.
22/The ROI chose to become a tax haven in EU (& euro) creating trade friction by encouraging jobs and investment to cross the border & it was highly succesful - today non-Irish businesses represent c 80% of Irish corporate tax, employ c25% of workforce and pay c50% of income tax.
23/However, the GFA does give NI assembly a direct say in any constitutional change between NI & rest of UK. The withdrawal agreement, by keeping NI within the EU CU and SM – without agreement of NI assembly does legally, technically and morally break the GFA.
24/By voting to leave the EU SM & CU the UK voted for an increase in trade friction between UK & EU – including Ireland. But the electorate knew this. Everyone made it clear that a vote to leave the EU was a vote to leave the largest SM on the planet. Yet still we voted to leave
25/ https://www.youtube.com/watch?reload=9&v=zNnh-KhiLm0
There is nothing in GFA or WA requiring UK legally, technically or morally to not increase trade friction. Indeed, doing so is a function of Brexit clearly understood when the UK voted to leave the EU
There is nothing in GFA or WA requiring UK legally, technically or morally to not increase trade friction. Indeed, doing so is a function of Brexit clearly understood when the UK voted to leave the EU
For a more detailed analysis of @HansMaessen plans for customs controls between the EU and UK (incl on the island of Ireland) please see this document which he presented to the Northern Ireland Affairs Select Committee
http://euquestion.blogspot.com/
http://euquestion.blogspot.com/
