Tariffs and a return of customs controls for goods travelling to and from the North seems “inevitable” if the customs union as it stands is abolished, a leading British academic has warned in new report.
Professor Jonathan Tonge from the University of Liverpool says physical checks on goods travelling across the Border like those in place on the France-Switzerland and Norway-Sweden borders are examples of what he believes are "comparable customs controls likely to be introduced".
In his report, published by the European Parliament Committee on Constitutional Affairs on Friday, Professor Tonge says fears of a return to a 'hard' physical border between the North and the Republic should not be exaggerated.
Prof Tonge believes that although the UK government has specified access to the EU customs union and tariff-free trade as negotiating priorities, the odds are in its favour.
“The chances of approval of a bespoke deal benefiting only the UK and Ireland and at odds with core EU principles may be remote.
Option
"One option would be for Northern Ireland to remain part of the EU customs union whilst the rest of the UK withdraws. This would permit tariff-free trade across the Border. However, it seems inconceivable that the EU would permit such an arrangement in the event of a UK Brexit, given that Britain would be a beneficiary of the onward transfer of goods from Northern Ireland," Professor Tonge says.
He believes, that for starters, it is not clear that the UK government would be happy to devolve the necessary power to the North to take charge of its own trade agreements.
But Professor Tonge acknowledges that were such a scenario to arise, one of the key beneficiaries of the arrangement would be the Republic because “34 per cent of its exports of goods and services go to the EU, of which almost half go to Britain, the highest single reliance upon British purchases of any EU country”.
According to the research, Brexit “matters even more to Northern Ireland” than to the Republic or the rest of the UK because the growth in exports from the North to the EU in recent years has been at a faster rate than exports to non-EU countries.
Exports
In 2014, exports from the North to the EU totalled £3.63 billion (€4.2 billion) compared to £2.53 billion of non-EU exports, according to Prof Tonge's analysis in his Impact and Consequences of Brexit for Northern Ireland report.
He also notes how important Northern Ireland’s current tariff-free and quota-free trade relationship with the Republic is to the North’s economy. He says 34 per cent of the North’s EU exports are sent to the Republic, making the State its largest market.
The research finds that some sectors in the North are more vulnerable to the potential fall out from Brexit than others - particularly the agricultural, forestry and fisheries sectors.
Ultimately Prof Tonge believes that the “prospects for a bespoke, tariff-free Northern Ireland-EU cross-border trade arrangement appear slim”.
