The DUP’s Jeffrey Donaldson says his party wants to explore the advantages of Northern Ireland’s unique access to the EU single market.
In a separate statement, DUP leader Arlene Foster said: “It is time for intransigence to make way for pragmatic and practical attitudes”.
In other words, the DUP realises it has to accept the sea border and promote the concept of a best of both worlds Brexit.
There are a couple of problems with this position. The first is the sheer cheek of it.
Having supported Brexit, made it worse for Northern Ireland then decried the consequences, the DUP is about to perform a reversal as ungainly as a ferry backing into Belfast Harbour. But that is no more of a U-turn than we have permitted it over the Good Friday Agreement. No doubt the UK’s trade deal with the EU, to be negotiated this year and probably for years thereafter, will be presented as a kind of St Andrews absolution, giving the DUP enough to claim this is what it wanted all along.
The second problem is more fundamental. Northern Ireland potentially had the best of both worlds under the backstop proposal from former prime minister Theresa May, which avoided a customs sea border through a soft Brexit. The DUP sank that and May along with it. Her successor, Boris Johnson, has signed a withdrawal agreement that ensures a regulatory and customs sea border in order to facilitate a hard Brexit.
Levying EU customs at the coast creates knock-on tariff and paperwork burdens for Northern Ireland manufacturers accessing the EU single market.
This is potentially the worst of both worlds and that is without considering the loss of migrant workers, to which Northern Ireland is uniquely vulnerable. Although offsetting higher trading costs through cheap labour is neither admirable nor ultimately sensible, is it the first option many businesses look for and Brexit shuts it down.
So where are the opportunities in Northern Ireland’s special status, as the DUP will carefully not be calling it?
The truth is there will be opportunities but they will come from our business climate getting weirder, not better. Any unique situation creates chances for enterprise, for good or ill. Somalia offers a perfect customs and regulatory environment for pirates, for example.
Northern Ireland’s best hope for a buccaneering Brexit comes from the asymmetries of the withdrawal agreement. The sea border applies mainly east to west rather than west to east and only for goods, not services. We will be in different parts of the UK and EU’s internal markets, to varying degrees, with full freedom to export to Britain no matter how awkward importing becomes.
People with more money-making skills than an Irish News columnist will be figuring out how to arbitrage this strange combination of worlds. UK trade agreements, which should include Northern Ireland, will only add to the complexity and opportunity. The concern about this kind of future is that you end up like an enormous Gibraltar, making a living off barely tolerated loopholes and geopolitical quirkiness.
The DUP might say this is already true of the Republic, which is heavily dependent on corporate tax rules that Brussels or Washington could change at any time. Does the party realise Northern Ireland will be in a similar position with Brussels and London?
If we become too clever with our access to the EU market, Brussels will tighten the rules. Managing that risk is central to the EU’s understanding of the withdrawal agreement. Firms and farmers in Britain could also ask for protection if Northern Ireland is seen to be leaking in EU goods, or just perceived as having an unfair advantage. Tightening the sea border west to east is entirely at the British government’s discretion.
It is clear from statements at Stormont that the executive foresees a future of trying to help business exploit Brexit’s asymmetric possibilities. There seems less awareness that the more this might succeed, the more the EU and even the rest of the UK might push back.
The only safe and sustainable way to have the best of both worlds is to agree it with London and Brussels every step of the way. Delightfully, if the DUP wants to explore the advantages of the EU single market, it will have to help negotiate our way back in.
