Ireland – The Second Government Brexit position paper

No one wants to return to a hard border between Northern Ireland and the Irish Republic. Even less does anyone, bar a few fanatics, want to return to the days of “the Troubles”. This much is obvious.

Settling the issues relating to what will be the UK’s only land border with the EU has been given a high priority by the EU too. Only yesterday, in response to the first UK government position paper (on customs), the  EU’s chief negotiator, Michel Barnier,  named the Irish question as one of three important issues on which agreement would need to be reached before serious discussions on trade-related issues could begin.

So a mere 24 hours after the position paper on customs, another has appeared which offers us some insights into the Government’s thinking on Ireland.

The paper identifies four priorities:-

  1. Upholding the Belfast (‘Good Friday’) Agreement in all its parts
  2. Maintaining the Common Travel Area and associated rights
  3. Avoiding a hard border for the movement of goods
  4. Aiming to preserve North-South and East-West cooperation, including on energy.

As far as the Good Friday Agreement is concerned, the paper points out that it was an agreement between the UK and the Irish Republic rather than the EU. Among other things, it affirmed “the permanent birthright of the people of Northern Ireland, irrespective of Northern Ireland’s constitutional status: to identify themselves and be accepted as British or Irish or both, as they may so choose; to equal treatment irrespective of their choice; and to hold both British and Irish citizenship.”  The UK Government has every intention to preserve this arrangement after Brexit.

The Common Travel Area pre-dated either the UK or the Irish Republic joining the European project. Indeed, Irish citizens have enjoyed special rights in the UK for most of the period since 1922 – a reflection of the strong, historic links between the Irish people and those in the UK. The Common Travel Area in its present form also involves the Isle of Man and the Channel Islands, which were never part of the EU. It allowed freedom of movement throughout the area and  allows Irish citizens to vote in the UK’s locla and Parliamentary elections.

Given that the Common Travel Area arrangements have been administered by the governments of the parties involved rather than by the EU and that the EU has been happy about this, the document maintains that there should be no reason why this situation should not continue after Brexit.

The “hard border” issue is likely to prove the most complex. In 1972, the paper informs us, there were 17 HM Customs and Excise boundary posts at the major road crossing points along the 310-mile long Northern Ireland land border and more than 200 other crossings not approved for vehicular traffic.  These have all disappeared but this is the number of potential crossing points which would need to be reinstated if a “hard border” were imposed. No wonder all sides are keen to avoid such a scenario.  Some farmers’ land straddles the border.

The paper recognises that it cannot propose a unilateral solution to the problem of maintaining the free flow of trade across the Irish border. It does, however, point to instances “where the EU has set aside the normal regulations and codes set out in EU law in order to recognise the circumstances of certain border areas.” – including the border between the Greek and Turkish sectors in Cyprus and the Croatia/Bosnia border. At the same time, the paper acknowledges that resolution of this issue “cannot be based on a precedent”. This makes sense for, after all, the EU’s aspiration is for Cyprus to be reunited with both parts of the island in the EU and likewise, Bosnia is a candidate country, even though it is unlikely to be joining the EU any time soon. By contrast, the UK is going in the opposite direction.

The paper also refers to the position paper on customs. Obviously, on the one hand the peoples of the UK and Ireland have an unique relationship, but the Irish Republic is an EU member state and part of the EU’s Single Market and Customs Union.  A solution for customs issues at the Irish border is inevitably going to be linked to wider customs and trade issues which will need to be addressed as part of the Brexit process, but as anyone who has visited the Irish Republic will be very aware, a substantial percentage of the products on sale in supermarkets in Irish towns and cities originate in the UK. It is therefore unsurprising that Irish officials are very concerned about the damage their economy may suffer if no trade and customs agreement is in place on Brexit. Leo Varadkar, the Irish Taoiseach, expressed a wish that the UK would not actually leave the EU, or if it did, that we would remain within the EEA. Dan Mulhall, the Irish Ambassador to the UK, by contrast, hoped that we would remain inside the Customs Union.

So the  progress towards the “innovative and untested” customs proposals and the possibility of a temporary customs arrangement discussed in the earlier position paper will be followed particularly closely in Dublin. Given that even if the UK government  changes tack and opts for ongoing membership of the EEA, agricultural goods would be outside this arrangement, it will take a lot of hard bargaining on both sides if all goods and services are to enjoy even relatively free access across the Irish border, whatever form that border may take. If it sticks to the proposals outlined in the position paper, there will be a number of areas where agreements on mutual recognition of conformity would have to be signed and time is short.

The North-South East-West cooperation may be a new term to many of us. North-South simply means the Belfast-Dublin axis and East-West refers to the relationship between London and Dublin. In many ways, the various fora such as the British-Irish Council and the British-Irish Intergovernmental Conference which have been set up under this label are the outworking of the recognition of the  close historic and geographical links between the UK and the Irish Republic. The cooperation has manifested itself in some specific sectors such as energy and the position paper emphasizes the need for the cooperation to continue after Brexit.

With this in mind, the concluding statement that a formal agreement between the EU and the UK on the Irish border issue early in the Brexit negotiations would not mean the end of any dialogue between the UK and the Irish government makes perfect sense. There will be a number of bilateral issues to resolve which do not directly involve the EU as a whole.

As with the position paper on customs, the abiding impression left by this document is that it has identified the issues which need a resolution without offering too much detail as to how they are to be resolved. Unlike the customs paper, however, where failure to reach an agreement would be far more disastrous for the UK than for the EU as a whole, when it comes to Ireland, a crashing out of the EU with no agreement would probably hit them harder than us. The Irish government is well aware of this and we cannot but hope for their sakes as well as ours that it will not be WTO rules on March 30th.

 

Britain needs to play it smarter

There is some chatter on the web as to whether Brexit can be parked. Personally I don’t see that happening. Call it a hunch but I think the process has taken on a life of its own independent of the politicians and they lack the coherence to influence it in either direction. I can, however, see Brexit transmogrifying into something that is neither Brexit nor EU membership.

The repeal bill process is not an afternoon at the photocopier. It’s a major feat of legal engineering and it is going to take years. We can pass certain bills that technically mean we have left but the Brexit limbo could be of such a composition where making the final switchover in various sectors, ending EU supremacy, would be viewed as so destructive that it would go into some sort of review, much like TTIP has, where it exists as a concept but it’s not actually going anywhere until it’s taken off the shelf and dusted down.

We have heard much about the possibility of an accidental Brexit where we crash out without a deal, but there is also a possibility of “accidental remain” where our lack of direction and inability to agree on anything leaves it hanging in the wind.

The only way I see to avoid this fate is for the government to face the reality that the EEA is the fastest and most practical means of leaving the EU. It doesn’t matter if the EEA is suboptimal. It has the singular merit of being out of the EU.

We can quibble until the end of time over the various compromises the UK would have to make but since the advent of the WTO agreement on Technical Barriers to Trade there is little likelihood of reaching that elusive regulatory sovereignty. That issue we can address later. To my mind it is secondary to ending EU political union.

If we do not want to drift into a Brexit limbo then we need to see some decisive action from the government. All we are seeing right now is dithering, pretending it’s all there for the taking when what we’re actually doing is reinventing the wheel – and a poor copy at that.

The basic mistake is the belief that the Brexit process itself is the opportunity to do everything all at once. This is a classic misnomer. If anything the Article 50 process is a lengthy admin chore we must go through before we can start looking at systemic reforms. The only safe and sensible way to leave is by reverse engineering our membership and that means the first step has to be quite close to EU membership. It wouldn’t even matter if post-Brexit absolutely nothing had changed. What matters is that, having completed Article 50, we would have the power to start changing things on our own schedule.

This is the bit where us leavers need to get real. All of us have a strong dislike of the EU, but we cannot say that everything about economic integration is bad. What matters is that we preserve what is worth keeping and build on it. It would be a grave mistake to sacrifice any European trade in the belief that trading with the rest of the world will compensate. It really won’t.

That though, is going to require some adaptation to our ideas. Like it or not, the EU has us over a barrel. As the regional regulatory superpower it does call the shots, and since the EU has a number of other countries hooked into regulatory harmonisation by way of FTAs we are going to find the wiggle room for an independent UK régime will be next to nil.

Ultimately we are going to have to change our attitude to the EU in order to make a success of it. The hostile and confrontational tone is not doing us any good and it’s dangerous because we will need the EU’s extensive assistance in borrowing their third party cooperation agreements and trade deals. Secondly, since we won’t be going all out for regulatory sovereignty, our trade policy will have to be a collaborative and complementary policy to that of the EU.

As we have seen the EU likes to get bogged down in deep and comprehensive bundled deals which take a number of years and very often get tied up in technical detail at the last minute over soft cheeses or formaldehyde content in furniture. Despite this method causing a number of hang-ups for CETA and the demise of TTIP, they don’t seem to have learned. There are other ways.

What we can do is look at effects based trade policy. As a foreign policy objective we want to reduce the push factors that drive migration. In order to do that we need to get the poorest countries trading. We are told by Suella Fernandes that Brexit means we can reduce tariffs for Lesser Developed Countries. This fails on three counts in that for a long time the UK will maintain the existing tariff schedules, LDC’s already have tariff free access under the Anything But Arms agreement – and finally, it’s non-tariff barriers which stand in the way.

Ultimately LDCs struggle to meet stringent standards. Jacob Rees-Mogg and the likes would have it that we can trade away our safety standards but that invites a deluge of counterfeit and dangerous goods. Consumers won’t wear it. Our mission is to use our aid budget for technical assistance to ensure that they can meet regulatory requirements for export. Not only does that improve their ability to trade with the UK it gives them access to the European market as well.

Effectively we would be improving access to the single market for everyone. The benefit to us is the eventual slowdown in migration but also more trade means more opportunities for UK fintech and business services. Something our economy is geared toward in ways that France and Germany are not.

By acting in this way we have no real need to get bogged down in comprehensive bilateral talks as the EU does. What matters is we are enabling trade and paving the way for the EU to forge deals, to which we can be a party. Sector by sector we can improve the viability of African trade at a speed the EU is incapable of.

As much as this approach is in the cooperative spirit, little by little it removes the EU’s excuses for excluding poorer countries and in so doing we make allies and friends with countries with whom we cooperate. From there we can forge sectoral alliances to further pressure the EU into liberalisation and perhaps changing its stagnant trade practices.

All of this is quite futile though if we maintain an adversarial attitude to the EU. If we leave the single market we actually surrender an ace in the hole for our trade strategy while also losing the opportunity to expand and enhance it – and wrest it out of EU control. Moving entirely out of the EU sphere leaves us hobbled in Europe and pecking at scraps elsewhere.

I wish I could report otherwise but it’s time eurosceptics faced facts. The world got complicated while we were in our EU slumber. The beast we helped create is a power in its own right with its own gravitational pull. What is done cannot be undone. What we can do is leverage our position as an agile free trading country to strengthen the global rules based system and drag the EU out of its protectionist instincts. If we can do that we solve a number of problems not only for the UK but Europe as a whole.

Photo by (Mick Baker)rooster

Michel Barnier’s recent speech – some salient points

Either Michel Barnier, the chief EU negotiator for Brexit, is off his head or there are fundamental misconceptions being held by our government’s Brexiteer Big Beasts.  The following is a summary of the most salient points apparently made by Mr Barnier speaking ‘frankly and sincerely’ about Brexit recently in Brussels to the European Economic and Social Committee.  A more detailed analysis is provided on EUreferendum.com, Brexit: Barnier – “that is not possible”.

Point 1 – on being outside the Single Market and Customs Union

“There will be no business as usual. The UK will become a third country at the end of March 2019”.

Point 2  – on the UK cherry-picking (through negotiations)

“There can be no sector by sector participation in the single market: you cannot leave the single market and then opt-in to those sectors. You cannot be half-in and half-out of the single market”

Point 3  – on being able to ‘influence’ the EU from the outside

“The EU must maintain full sovereignty for deciding regulations: the EU is not only a big marketplace. It is also an economic and social community where we adopt common standards. All third countries must respect our autonomy to set rules and standards. And I say this at the moment when the UK has decided to leave this community and become a third country.”

Point 4  – on the British Side being out of touch with the reality of the EU

“I am not sure whether they have been fully understood across the Channel”. “I have heard some people in the UK argue that one can leave the single market and build a custom union to achieve ‘frictionless trade’, ……that is not possible”.

Point 5  – on the status of UK having left the EU – comprehensive free trade agreement (even if agreed before then doesn’t change this status)

“Whatever the outcome of the negotiations, at midnight on 29 March 2019, the United Kingdom will at the present stage be a third State, which will therefore not have the same facilities and rights as a State Member of the European Union. It’s its choice. Not ours”.

Point 6  – on trading from the outside being more difficult (e.g. customs duties and non-tariff barriers exist)

“A trade relationship with a country that does not belong to the European Union obviously involves frictions”.

Point 7  –  on no deal (trading under World Trade Organisation Rules) being a practical non-starter

“I therefore want to be very clear …to my mind there is no reasonable justification for the ‘no deal’ scenario. There is no sense in making the consequences of Brexit even worse”.

Point 8  – on cutting losses arising from the new relationship between the UK and EU

“Business should assess, with lucidity, the negative consequences of the UK’s choice on trade and investment. And prepare to manage them”.

To conclude

Mr Barnier has a conception of Brexit negotiations that is not shared (publically at least) by our government. The main takeway from M. Barnier’s speech (and assessment) is that he feels the UK is unprepared for Brexit or even to negotiate realistically based on the reality of dealing with the EU. A comprehensive free trade agreement finalised within two years isn’t going to happen, he claims, and would not solve all problems of seamless access to the Single Market. And it will not be all right in the end unless the UK’s Brexit negotiators understand what is actually involved.

Photo by EPP Group in the CoR

Mayday, Mayday! Brexit Mayday!

Be not intimidated…nor suffer yourselves to be wheedled out of your liberties by any pretense of politeness, delicacy, or decency. These, as they are often used, are but three different names for hypocrisy, chicanery and cowardice. ― John Adams, 1765, British Citizen, Founding Father and 2nd President of The United States of America

It’s over! It’s over, bar the ridiculous charade of ‘tough negotiations’. The thoroughly nasty and vindictive European Union (EU) has won. And gallant, heroic and duped Mrs May and her negotiating team have already lost. We can forget a fair deal on Article 50 of the Lisbon Treaty and a free trade agreement.  And, unlike in normal divorce proceedings, there is no independent arbitrator to ensure something approaching ‘fair play’ where differences are irreconcilable.

In any negotiation the parties have to progress in good faith because each knows things the other cannot know; privileged information that could be used by the unscrupulous to exploit the situation.  Our contract law consequently places obligations on the parties and means of redress through the courts when one party abuses its position.  Unfortunately the EU, so far, appears to be negotiating in bad faith, not telling the full truth about what can and cannot be negotiated, and the UK is buying the deceptions considerably weakening our position; the EU are effectively ‘laying down the law’ and simultaneously getting us ‘over a barrel’.

Ambassador (rtd) Leonidas Chrysanthopoulos (Former Secretary General of the Black Sea Economic Cooperation Organization) was on the inside of the Article 50 negotiations when it was included it in the Lisbon Treaty. He has revealed that Article 50 was only intended to cover financial arrangements for a Member State leaving the EU. The remaining conditions now being set out by the EU are outside its scope and can only have been included to pressurise us, exact a far heavier price and coerce others into not leaving the EU.  It is one thing freely to negotiate issues that are outside the scope of Article 50 but quite another dishonestly to hold a sword of Damocles over Mrs May’s head that ‘everything must be agreed before anything is agreed’.   Obviously Europhiles on the inside are not going to own up to this subterfuge; they haven’t up to now have they?

Then there is the misinformation about the Single Market, free movement of people, costs of Single Market membership and the jurisdiction of the EU’s European Court of Justice (ECJ) etc. Different arrangements are open to members of EFTA; the European Free Trade Association who are also members of the Single Market, (the European Economic Area (EEA)) but not Member States of the EU and its Customs Union. They can and do negotiate free trade agreements with other countries. Free movement can be unilaterally suspended by any member of EFTA by invoking Article 112 (the Safeguard Provisions) in the EEA Agreement. The UK as a member of EFTA would be able to do the same, if we chose to leave the EU and join this trading association of independent European countries to remain in the EEA.  Also, it costs the EFTA countries little financially to be members of the EEA although Norway does separately contribute towards EU facilities or services used and to development funds.  The ECJ only has jurisdiction over the EU Member States and hence over part of the EEA, but not over EFTA (i.e., non-EU) countries.

There is also increasing evidence that the EU is out to punish us for the temerity of Brexit. Their ‘negotiating position’ is hardening and the language becoming ever more strident.  For example, see Britain needs fighting ‘Plan B’ for trade as EU turns screws on Brexit by Ambrose Evans-Pritchard first published in the Daily Telegraph 26th April 2017. They can also be very obstructionist. For example, see The six Brexit traps that will defeat Theresa May by Yanis Varoufakis, former finance minister of Greece, published in The Guardian 3rd May 2017. Perhaps worse, the EU knows how to inflict real damage on our economy in the event of us leaving the Single Market (EEA) and becoming a ‘third country’ with or without a trade deal.  On the outside, we would face external tariffs, non-tariff barriers (such as special rules, standards, certifications, approvals and inspections) and a massive expansion of Customs Clearances both here and in the protectionist EU (which they might want us to pay for as well).

What we are seeing is a well-established modus operandi for the EU which can be explained in a few quotes from Jean-Claude Juncker, President of the European Commission:

When it becomes serious, you have to lie.

We decide on something, leave it lying around and wait and see what happens. If no one kicks up a fuss, because most people don’t understand what has been decided, we continue step by step until there is no turning back.

There can be no democratic choice against the European treaties.

Article 50 negotiations as they now appear can’t achieve a reasonable outcome in our interests (we are being misled) and who would actually choose to touch these EU people  – gangsters more like – with the proverbial barge pole?  We need a plan to out-manoeuvre them, a strategy to ensure they cannot hurt us and to avoid any negotiating except where we are the visibly stronger party; money and concessions invariably flow from the weak to the strong.  These are high stakes and if we get it wrong the EU will likely exact a price worse than they’ve inflicted elsewhere, notably upon Greece.

We could ‘weaponize’ our ingenuity, industry and research to redress the balance of negotiating power, for example, by investigating background facts, intelligence gathering and analysis; something akin to the backroom work of Bletchley Park. There are obvious skeletons in the EU cupboard and some that need digging much deeper, such as the sinister origins of the EU and long-standing anti-British sentiments.  The earliest predecessor of the EU (the European Coal and Steel Community) was profoundly anti-British and had an aim to damage our then industrial power. We were saved by the then Prime Minister Clement Attlee from this calamity, only to have later Prime Ministers and British civil servants collude in the EU’s ‘management of our decline’.  Former EU insiders ‘coming clean’ could be goldmines of information.

We could cultivate allies and build alliances with those we can do business with to mutual benefit.  The obvious ones are EFTA, probably by becoming a (temporary) member. The media here and overseas, up till now mainly Europhile could be another ally. Communications to influence public opinion are essential, otherwise the EU’s propaganda arm and fellow travellers will use it against us.

There are other things that can also be done to defend our national interests once it is recognised that the EU’s actions relating to Article 50 are part of a major scam.

England has saved herself by her exertions, and will, as I trust, save Europe by her example. William Pitt the Younger 1805

Open Europe’s proposals for a trade deal outside the Customs Union

Open Europe did not win to many friends in the run-up to last June’s referendum vote, its “reformist” position created mistrust among both leavers and remainers, being too supportive of staying in for the former  and too EU-critical for the latter.

Following the vote to leave, Open Europe has continued to contributed to the debate, producing analysis now aimed at securing what is, in its opinion, the best possible Brexit deal.

Its latest offering came out earlier this week. Entitled “Nothing to declare: A plan for UK-EU trade outside the Customs Union“, the full paper can be downloaded from the Open Europe Website.

During the referendum campaign, the customs union hardly featured as an issue, unlike the single market. This is unsurprising as the leave campaign emphasized the importance of being able to strike our own trade deals – something which is impossible as a member of the customs union.

Open Europe’s key points are as follows:-

  1. The UK should leave the EU’s Customs Union (EUCU). The UK Government has stated its intention to leave key parts of EUCU (the Common External Tariff and the Common Commercial Policy). Open Europe’s assessment is that leaving these and EUCU overall is correct. Brexit means the UK must be able to shape its own trade policy. It can only do so outside of EUCU.
  1. The UK should not seek a ‘half-in, half-out’ arrangement, which would be the worst of all worlds. The UK should leave EUCU entirely to maximise opportunities. Prime Minister Theresa May has suggested that she is open to being an “associate member” of EUCU or remaining a signatory to elements of it. Open Europe believes that, while it is sensible to keep an open mind, no ‘half-in’ option is better than being fully out. Nonetheless, the UK should consider retaining membership of some relevant conventions.
  1. It is in both the UK’s and EU’s interest quickly to secure full cooperation on the practicalities and administration of customs as part of a comprehensive Free Trade Agreement (FTA). Such an agreement could be a chapter in a UK-EU FTA or an accompanying, discrete customs facilitation agreement. The EU already has agreements on customs facilitation with non-members, including Switzerland and Canada. A comprehensive UK-EU FTA will ensure the continuation of tariff-free UK-EU trade and minimise customs delays.
  1. There will inevitably be a degree of cost to the UK economy associated with leaving EUCU. Some costs will be one-off adaptation costs (e.g. technology investment which may have benefited the UK anyway); other costs will be on-going frictional costs to UK-EU trade. These costs can be minimised and may be offset by trade liberalisation with non-EU partners.
  1. The UK must take action now to minimise costs and seize new opportunities. Some steps are unilateral, domestic reforms; others are bilateral with specific EU members (above all Ireland); other negotiations need to happen at EU level, or indeed more broadly.
  1. There will also be costs to the EU economy and these costs will be much greater if full customs cooperation with the UK is not secured. The costs to the EU economy will be greatest in those countries and industries which export the most to the UK. If comprehensive customs cooperation and an FTA are secured, these costs will be minimised.
  1. There are challenges and opportunities from leaving EUCU but these vary from sector to sector, and even between companies in the same industry. Individual companies will need to look carefully at their supply chains and consider making adjustments where appropriate.
  1. Free trade does not require a customs union and over half of UK trade happens without it. Most UK trade (51.5% in 2015) is not with the EU. Non-EU trade takes place without a customs union and is growing faster than trade with the EU. In 2015, the US was the largest recipient of UK goods exports (16.6%). There is no EU-US FTA, let alone a customs union.
  1. Companies with complex supply chains can trade without a customs union. For example, automotive supply chains cross the US-Canada border. Both countries are North American Free Trade Agreement (NAFTA) members, but are not in a customs union. Nonetheless, leaving EUCU will challenge companies with complex supply chains. To address challenges, the UK and EU need an FTA to eliminate tariffs, to agree liberal cumulation so more products transformed in either the UK or EU can be considered as originating anywhere else in the UK or EU, and to cooperate and use technology to minimise bureaucratic delays and costs.
  1. The UK should ‘grandfather’ – i.e. replicate – the FTAs that the EU has concluded with third countries. The UK, as an EU member, is currently party to over 30 FTAs with over 60 non-EU countries. The Canada-EU FTA, CETA, is one example. Discussions on how to ‘grandfather’ these agreements should be underway bilaterally between the UK and third countries but also need to engage the EU. Protecting these agreements will secure the freest possible trade, safeguarding existing global supply chains, and supporting growth in global trade.
  1. There is an extremely strong economic case for full UK-EU customs cooperation; the question of whether it is achieved or not is primarily political as much as practical. Reaching a comprehensive UK-EU customs agreement will be technically easier than other trade agreements. As an EU member, the UK’s customs systems are already fully recognised by EU members and the UK already applies EU product standards. Businesses across the EU are used to tariff-free trade – so there will be less pressure to defend specific industries.
  1. The UK and EU should consider a transition period to extend the UK’s EUCU membership for one or even two years. Theresa May has suggested “phased implementation” for new arrangements on customs systems. The two-year Article 50 timetable is a challenging limit for negotiations. A transitional period would increase chances of a favourable deal for both sides, and minimise potential disruption to UK and EU business. It would also give governments and business time to adapt, including by upgrading customs procedures and IT. Agreement on a transition period is most useful early in the Brexit negotiations to reduce the risk of companies making rushed decisions on changes.

 

Why Brexit should be followed by Irexit

By Anthony Coughlan

The Republic of Ireland joined the then European Economic Community in 1973 primarily because Britain and Northern Ireland did so. Now a group of Irish economists and lawyers of which I was rapporteur have produced a report advocating that Brexit should be accompanied by “Irexit” (Ireland Exit), for a number of decisive reasons.

If the UK leaves the EU customs union while the Republic stays in the EU, the North-South border within Ireland will become an EU land frontier, with customs controls being inevitable and possibly passport controls too. EU-based laws and standards, for example in relation to crime and justice, will prevail in the South and UK-based ones in the North. The only way for the Republic’s politicians to avoid adding new dimensions to the North-South border within Ireland is therefore for them to leave the EU along with the UK.

Since 2014, the Republic has become a net contributor to the EU Budget. This is a big change from the previous 40 years, during which it was a major recipient of EU money, mainly through the EU’s Common Agricultural Policy. In future, money from Brussels will be Irish taxpayers’ money recycled, as is already the case with the UK. This removes what up to now has been the principal basis of Irish Europhilia, official and unofficial – namely, easy EU cash, not any ideological enthusiasm for Eurofederalism or “the EU project”.

If the Republic seeks to remain in the EU when the UK leaves, it will henceforth have to pay more to the EU Budget as its proportionate contribution to help compensate for the loss of Britain’s contribution. On the other hand, a bonus for Ireland of leaving the EU along with the UK is that it would get its sea-fisheries back – the value of annual fish-catches by foreign boats in Irish waters being a several-times multiple of whatever money Ireland has got from the EU over the years.

As regards trade and investment, the Republic sends 61 per cent by value of its goods exports and 66 per cent of its services exports to countries that are outside the continental EU26, mostly English-speaking. It gets two-thirds of its imports from English-speaking countries. The USA is the most important market for the Republic’s foreign-owned firms and the UK for its Irish-owned ones – the latter being particularly important for employment. These two markets together are comparable in importance to that of the EU26 post-Brexit. Taking other English-speaking markets into account makes the English-speaking world much more important for the Republic than the EU minus Britain. This is also so for foreign investors coming to Ireland. Economically and psychologically, Ireland is closer to Boston than Berlin, and to Britain than Germany.

It is not of course a question of the Republic having to choose between one export market and another if it should decide to leave the EU along with the UK. If common sense prevails in the negotiations, there should be continuing free trade between the UK, Ireland and the EU in the context of Brexit and Irexit occurring simultaneously.

Without Britain as an ally beside her in the EU Council of Ministers, the Republic will be in a much weaker position to defend its low rate of company profits tax, which is the principal incentive that it uses to attract foreign capital investment to the country. Germany and the Brussels Commission are already gunning for this. It would also be in a weaker position to defend its fishery interests, its trade interests, its distinctive Anglo-Saxon-based traditions in the area of law and justice, which the EU aims to harmonise, and its military neutrality.

The main argument for the Republic staying in the EU when the UK leaves is the negative one that it is a member of the Eurozone while the UK is not. When the euro was established in 1999, Dublin’s ultra-europhile politicians were so foolish as to adopt the currency of an area with which Ireland does only one-third of its trade. They thought at the time that the UK would be bound to adopt the euro-currency too, and that Dublin would show how “communautaire” it was by going first! The Republic now desperately needs to get its own currency back so that it can devalue it along with sterling and the dollar, and not be stuck with an implicitly overvalued euro that is now crucifying its exports.

That is why Dublin should aim to leave the Eurozone in a planned, concerted manner, negotiating its departure with Germany, the ECB, the UK and the Bank of England in private behind the scenes as part of its move to leave the EU along with the UK, rather than be forced to abandon the euro anyhow in the next Eurozone financial crisis.

The EU plans closer military cooperation when the UK leaves. From Britain’s point of view, can it be be happy with the thought of the Republic participating in EU security and defence policy and implementing ever-closer integation with an EU/Eurozone that is likely to come under greater German hegemony following Brexit?

Germany, like the other 27 EU States, will seek to prevent Brexit if it can but, if it is unable to thwart it, it will accept it, as will the others. This and other considerations may possibly encourage Germany to support Irexit alongside Brexit if that should become Irish Government policy. Germany could more easily aspire to greater hegemony over the continental EU Member States if Ireland as well as Britain cease to be EU members. This should appeal to influential sections of Germany’s current political elite.

It is only since Theresa May’s speech in January that Ireland’s ultra-europhile political Establishment is beginning to realise that Brexit really does mean Brexit, and the case for it being accompanied by Irexit is starting to be heard in Irish business circles. Irish public opinion is in advance of élite opinion on this. An opinion poll last October showed that almost four in ten Irish people would choose open borders and free trade with the UK over the EU. This was before there was any realisation of the hugely adverse effects on the Republic if it is so foolish as to seek to remain in the EU when Britain and Northern Ireland leave it.

That realisation is now growing in Ireland. Both public and élite opinion is likely to move in the direction of Irexit over the coming two years, and UK policy-makers should do all they can to encourage it.

This article originally appeared on the Conservative Home website.