Brexit: the facts

Consequently it is almost impossible to understand what is going on, what the real issues are, what needs to happen. For all the acres of newsprint and the hours of TV coverage getting to the facts is proving a challenge.

Late last week Queens academic, Katy Hayward, regarded by many as the expert on Brexit produced a short document which attempts to put that right, untangling the complexities in 11 Powerpoint slides.  

For the benefit of all those interested in this vital area of public policy Scope has used it as a guide to summarise the key issues.

The Good Friday Agreement (GFA)

There has been much debate about the extent to which the GFA will be impacted by Brexit. It becomes a little clearer when you step back and consider what this internationally-binding agreement covers.

It has three strands: the first set up the Executive and Assembly and Civic Forum, none of which are currently in operation. The second created an Irish dimension to the governance of Northern Ireland The North–South institutions (the North–South Ministerial Council (NSMC) and the North–South Implementation Bodies) encourage co-operation that benefits both Northern Ireland and the Republic of Ireland. Under this strand there are now 142 separate bodies of co-operation on the island covering issues as diverse as transport, health, tourism and waterways.

The third covers east/west relations. The British–Irish Council and the British–Irish Intergovernmental Conference were set up to encourage co-operation and develop good relations between Britain and Ireland. These are forums where the two Governments can discuss Reserved Matters – ie those not devolved to Stormont – these include financial services, international trade and civil aviation.  

In addition the Agreement incorporates the European Convention of Human Rights, giving that court the power to overrule Assembly legislation which is in breach of the convention. It also set up the Northern Ireland Human Rights Commission.

Other relevant provisions include the principle of consent which at once pledges no change to the constitutional status of Northern Ireland unless people vote for it and the prospect of a united Ireland if this was voted through via referendum both in Northern Ireland and the Republic.

The GFA was therefore devised and built on the assumption that both states would share membership of the European Union.

How Brexit might impact the peace process

Up until the Brexit referendum cross border work had been largely depoliticised and UK/Irish co-operation and harmonisation, itself boosted by the GFA was proceeding smoothly.

 The border is now the central issue dividing the UK and Europe. This in turn serves to reinforce tensions between nationalists and unionists. Although it is important not to over-state the impact this could have on extremists, the PSNI and others have expressed concerns. Whatever the outcome of Brexit this debate has a de-stabilising effect for both nationalists and unionists.

The Movement of Goods and Customs controls

The biggest immediate risks post Brexit will be how to manage non-UK goods entering the EU via the UK and non-EU good entering the UK via the EU. And as the UK diverges from the EU, then risks associated with direct trading between the UK and EU will also grow.

The level of customs controls will vary according to the settlement reached.

There are some that already exist within the EU and still would if the UK were not to exit. These include the transport of hazardous waste, the importation of illegal drugs into individual nations, and all those items (alcohol and cigarettes for example) that attract excise duty.

If the UK were to remain in the single market but outside the EU (like Norway, for example) then controls are extended and those covered include agricultural produce and all third party country goods.

If it were to be in a Customs Union (like Turkey) then all goods not specified under the CU agreement would be subject to controls, regulatory compliance would need to be satisfied and areas such as transport and agriculture would have to be negotiated.

A Free Trade Agreement (like Canada) would involve regulatory compliance checks. All goods not specified in the agreement would be subject to controls as would all third party country goods. Agricultural goods and transport would need to be negotiated and rules of origin VAT paid on import.

In the case of No deal  what is known as Conformity Assessment Procedure would apply to all products before they could enter the EU market, this brings with it the potential for customs controls (tariffs & quotas) for all goods crossing the border; there would be regulatory compliance checks, some agricultural goods would have to enter through specialised border inspection posts; VAT would have to be paid on imports and permits would be required for all transport services.

What “Smart” Border technology means

Several Brexit proponents have suggested that any future customs checks can be resolved by the introduction of technology. This would reduce paperwork and the time taken to cross a border, thus eliminating much of the potential inconvenience. But to work it would require surveillance at both approved and unapproved border crossings, physical hardware at the border to identify vehicles and the capacity to inspect freight – ie clearance depots either at the border or some distance from it.

The impact on the border of  the options currently being considered

A full alignment of the UK with EU single market and customs union rules would have minimal impact on the Irish border.

The backstop currently in the withdrawal agreement – would mean no customs barrier to movement on the Irish border, free movement of NI  and EU origin goods, continued cross-border service provision and cooperation in specific areas. There would be no automatic free movement of services and workers and it would require Rules of Origin checks on goods entering NI from GB

If the UK remained in the Customs Union but left the EU, movement of services and workers would need to be negotiated and, over time, regulatory divergence would be a barrier to trade. In the case of a Canada-style Free Trade Agreement customs controls would have to be imposed at the Irish border unless there were specific provisions for Northern Ireland

What’s been agreed so far

The withdrawal agreement includes a protocol for Northern Ireland/Ireland (the so-called backstop). Much of it has either been agreed or agreed in principle. Examples of areas agreed include: the movement of people across the Common Travel area; maintaining conditions for continued north/south co-operation in areas which include health, tourism, transport and agriculture. Areas agreed in principle include the protection of rights as specified under the Good Friday Agreement; the continuation of the Single Electricity Market and EU state aid laws to apply to Northern Ireland.

Crucial to the current debate are the most contentious areas in dispute include Northern Ireland remaining in a common regulatory area under the jurisdiction of European courts, and Northern Ireland to remain in the customs area of the EU with EU VAT and customs rules to apply.

Resolving the Backstop Problem

The EU’s position is crystal clear. No backstop means no deal. The UK’s position is more nuanced. Its White Paper hopes that the “operational legal text” agreed with the EU will not have to be used. But both sides agree that there will be a backstop. So whilst the EU is insistent that the Irish border is a major sticking point, the UK’s position is that it is both committed to no Irish border, but also, critically, none within the UK.

The EU has now said that the UK needs to come up with a text for the backstop with the UK government saying it has not ruled anything out in terms of the model. A paper from the UK government on this could be produced as early as this month.

The European Union has indicated that it is ready to “improve” the protocol to be more specific about which controls are needed and where and how they should be carried out. The UK wants to ensure that customs checks are unnecessary but recognises that Northern Ireland does have specific needs within the ultimate deal.

What our local parties want

Finally in terms of our local political parties, there are a number of critical policy issues on which there is a degree of alignment based on what they have to say in their manifestos of 2016 and 2017. A word of caution, however. Policy positions have and will continue to shift as they respond to developments in the negotiations.

All agree that there needs to be specific arrangements for Northern Ireland, that there should be no hard border, that Northern Ireland should have access to the Single Market and that travel and trade across the border should be frictionless, but significant differences as to how that should be achieved. So, in relation to specific arrangements for example, Sinn Fein believes Northern Ireland should have special status within the EU, whilst the DUP argues for specific solutions for specific circumstances. The Ulster Unionists want NI to become an “Enterprise Zone” whilst both Alliance and the SDLP argue for a special deal which would include membership of the European Economic Area (Europe’s free trade zone).