Tag: Lord Wolfson

Border control

“Let’s get some perspective on that 0.001% risk to the EU single market collapsing in chaos.”

A while back, in January, on the Clare Byrne show a guest who was ex Irish Military made a not often heard point on the Irish Border that so obsesses the EU and virtually every commentator on Brexit.

His point that there were three types of border.

An open border – pretty much the CTA for people between UK and Republic of Ireland. For goods, generally within Schenghen, or between States in the USA. That doesn’t mean no differences, simply that those differences are not especially managed at or on a border crossing.

A controlled border – this can be light or not so light. For example anyone from the UK or Republic of Ireland still has to go through passport control when entering a Schenghen member country, and on return to point of departure. While borders are always territorial they can be located anywhere – the USA has pre-Authorisation Immigration at Dublin Airport, with passengers entering USA once past the US Border officials. Controlled borders require visas or visa waivers for people, and tariffs and checks that are paperless or physical in triplicate for goods; and for services there are sometimes regulations and/or controls on operation. These are all the stuff of international law and treaties, and of international disputes.

A closed border – was the Berlin Wall, and many other States whose borders were to keep their own people in as much as others’ out. These were usually highly militarised and with physical barriers. There was some possibility to cross such borders – an exchange of West Marks to East Marks and a tram ride for the adventurous. Thankfully the world has fewer to these than were common even 40 years ago. The line between North and South Korea is perhaps the only obvious such border that might spring to mind today. The chaos of Syria might make that a border few wish to cross, more from confusion and ill-defined order than any physical barrier, but the problem arises perhaps that it is not a closed border in any sense. That said a closed border is just that – closed to crossing.

Where on the point between the description of open border and closed border do we put the mark on the map between the UK and the Republic of Ireland over the past half-century? Undeniably the current land border is fairly open and is in considerable contrast to the border during the height of the IRA terrorist years, and moving through ports and airports is completed with considerably more ease.

Yet even at the height of the IRA terror there was never a completely closed border.

While effort was made to close some minor roads, this was done to endeavour to reduce the ability of the IRA to use such roads to escape into the Republic which always seemed rather ambivalent towards extraditing IRA suspects back North.

The recent images conjured up by those supporting Remain in the Brexit debate miss (deliberately or indifferently) the point that the few watch towers along the border were there to monitor and protect the largely on-going and uninterrupted flow of traffic of people and goods crossing the border.

With the terror largely gone it is hard to actually understand why anyone would assert the idea that army watchtowers would be back along the border anytime soon.

Fact is the border will remain fairly open, despite Brexit.

The Common Travel Area encompassing the British Isles means that for people travelling North, South, East and West across our islands, travel will be as open as ever: the same travel inconveniences will apply when entering the Schengen area within the EU; not that much really. For people there will still be an open border.

What is being discussed with Brexit around Single Customs Area and Customs Union is the degree of control required to manage the difference in trade and regulatory policy between two jurisdictions the UK and EU. It is a matter of trade management.

Again, the image conjured by Remain supporters is a memory of long queues of lorries and vehicles at customs posts all along the border – and again conveniently often conflated, or inflated, due to added security checking at key transit points.

Even the most recent of these memories would have been at a time when mobile phones were still bricks attached by cable to a breeze-block of a battery. Computerisation, IT, electronic processing has happened since that time. It has transformed the international management of trade. Only a very small percentage of non-EU trade is subject to a physical check.

99% of customs declarations for non-EU trade are currently received electronically by HMRC. These do not necessarily require the presence of border guards and checkpoints, nor should it necessarily mean technology or cameras at the border.

Technological solutions away from the border, such as electronic pre-clearance, should be under serious consideration going forward. Other goods checking likely at border would be a variety of safety and security checks, from verifying the safety of the supply chain, to checking regulatory compliance, and conducting veterinary, phytosanitary or quarantine controls. While technology is not entirely a solution, controls are less necessary when both countries agree as partners to recognise each other’s standards, regulations and security enforcement with goodwill; and even then, checking is not essential at the actual border.

With all but a tiny proportion of trade subjected to physical checks it is difficult to understand exactly why scaling up to cope with EU27/UK trade would be so challenging. The Irish Revenue Commission was once of the same opinion:

“To put this in some context, Revenue processes around 1.4 million customs declarations every year. Of these 53% are imports and 47% exports, and around 57,000 transit arrangements. Exports are generally checked only for safety and security reasons and in 2016, less than 0.5% of export declarations were checked. Customs checks mainly apply to imports. In 2016, 6% of import declarations were checked and less than 2% were physically checked. The vast majority of these checks were carried out in approved warehouses and other premises, with a very small number at a port or airport.”

“The low level of import checks is the result of pre-authorisation of traders, advance lodgement of declarations and an extensive system of post-clearance checks, including customs audit, which are carried out at traders’ premises. “Authorised Economic Operators” (AEOs) have a special status in the system and under agreed protocols are allowed to operate greatly simplified customs procedures. There are currently 133 AEOs and these account for 82% of all imports and 89% of exports. It will be very important that the bulk of trade continues to be through AEOs after Brexit.”

All of this is probably the foundation of the recent NI Affairs Committee Report suggesting technology was possible in due course.

Not that it hasn’t been said before.

An important point there, that we broadly still use seventeenth century ideas to collect tariffs of just £3.5bn while the British Revenue collects £125bn in VAT receipts, largely on self-assessment. That would be £3.5bn of tariffs on £352bn of non-EU world imports in goods and services to the UK: which is about 1%. Total Irish imports in 2018 €90bn, of which Northern ireland represented just €1.4bn or just about 1.5%. Total imports to EU28 in 2108 equalled €1,977.5bn. If we deduct UK imports from the EU28 figure (using £=€ for ease, and for making the point it hardly makes a difference), that means world imports to EU27 at €1,625bn, of which the NI import figure will represent just 0.001% of EU importsThis is the scale of the threat to the EU single market without the ‘backstop arrangements’?

Starting from a point where there isn’t any difference in regulatory standards etc between the UK and EU27, change could be managed gradually. And proportionally, in respect of the volume of trade North/South on the island of Ireland over that ‘land’ border, the EU single market is not going to be brought to its knees by what amounts to a box of oranges, except in absolutist irredentist terms.

There is a desperate need to get back to practicalities and a sensible look at the issue of managing borders, technology, and what it takes to live and trade in the real world and not in the legally framed utopia that the EU demands for itself. Without the backstop in the DWA, let’s get some perspective on the prospect of that 0.001% risk to the EU single market collapsing in chaos. The EU has far more pressing issues that could precipitate a crisis.

The EU called initial UK proposals on trade management ‘magical thinking’, and then used the same magical thinking to suggest a border down the Irish Sea. When Theresa May brought forward the idea of the Facilitated Customs Arrangement (FCA), which included elements of proposals around maximum facilitation of customs, such as use of automation, streamlined procedures and simplified customs declarations, Michel Barnier’s response was pretty unequivocal:

The EU cannot—and will not—delegate the application of its customs policy and rules, VAT and excise duty collection to a non-member, who would not be subject to the EU’s governance structures.”

We now have in the Withdrawal Agreement “the backstop” that would allow for a process to operate not ‘subject’ to the UK’s governance structures. That does not even begin to look at the constitutional issues brought about by the backstop, best summarized by Dominic Raab following his resignation as Brexit Secretary:

“The Cabinet was told that Northern Ireland will be treated as a third country for regulatory purposes. I don’t think that’s consistent with keeping the union together.”

Just as the EU is a political project, which over-rides all else, so the EU has conducted negotiations with a view to that political project. The UK has seen it, still, in transactional terms. The twain doesn’t really meet.

It is absurd for people to suggest that the Government is pursing a policy of ‘no-deal’. Seriously, the problem is not that it seeks no-deal, but that May’s Draft Withdrawal Agreement has such fatal flaws that it is broadly unpalatable to just about everyone.

In the UK the DWA threatens trust in politics. 

More generally, the DWA is not regarded as a conclusion to negotiation that is built on goodwill, or trust. Mutual interest is based on trust as well as outcome. The backstop is based on a lack of trust – an insurance policy sounds better, but scarcely hides the Irish Government return to centuries of animus towards perfidious Albion. So much for the value of 20 years of the Good Friday Agreement – its East West Strand 3 brought to nothing by resurgent Irish shibboleths.

As Paul Goodman outlines in his Conservative Home article.

“Downing Street suggests that a consequence of the deal being passed as it stands is that the Government would then be able to move on – to deal with childcare, housing, jobs, the NHS and other issues close to the heart of so many voters.  But the effect of the deal going through would be the very opposite.  For trade talks would wake issues from their uneasy sleep that voters thought had been put to bed: fishing, market access, bits of Chequers, migration numbers and, yes, the backstop.  Brexit would roll on in its all-consuming way.”

Paul concludes:

“To vary some words once said by Keith Joseph, Brexit is not enough.  It must walk hand in and with trust.  If tomorrow’s vote takes place, it won’t primarily be about Theresa May’s future, much as some seem to think otherwise.  At its core will be the issue of trust in politics.  This will shrink further if the Commons passes a deal that the Government itself has indicated now needs a sweeping overhaul.”

The only way to bring clarity, quickly, is to leave on March 29thand rebuild. The last thing the DWA or an Extension to A50 will bring is ‘certainty’ no matter how long Brexit is delayed.

It is said that those who voted leave didn’t vote for ‘no-deal’ nor to be poorer – based on various predictions of how future economic growth might be affected. True. Perhaps. However, given the economic Armageddon that was predicted for the morning after a Leave vote – emergency budget anyone – it would have to be at least as bad to convince a public that is already distrustful of politicians that ‘no deal’ isn’t such a bad choice.

UPDATE

Had only just published the post above, and this appeared…. magical French thinking:

You can read the story here.

But of course, none of this could ever possibly work to monitor the tiny quantities of agricultural products and construction materials that cross the Irish border…” H/T @GuidoFawkes