Brexit Institute News

Workshop on Brexit, the Border and the Internal Market

By Annelieke Mooij and Sose Mayilyan, PhD Students, Dublin City University

The DCU Brexit Institute hosted an event on “Brexit, the Border and the Internal Market” on 26 October 2017, supported by the European Commission Representation in Ireland. The event addressed the issue of the border between Ireland and Northern Ireland, which is arguably the most sensitive of the three items in the withdrawal negotiations, and considered also questions concerning the access by the UK to the EU internal market post Brexit.

Opening debate

After opening remarks by Gerry Kiely, head of the European Commission Representation in Ireland and Trevor Holmes, vice president of Dublin City University, the event started with a debate between Alyn Smith, a Scottish member of the European Parliament and Neale Richmond, member of the Irish Senate. Both speakers were given the floor to present their positions.

Alyn Smith (MEP) called Brexit the defining political event of our age. He explained the consequences of the Brexit upon the struggle for an independent Scotland. To this effect a referendum was held in 2014 whereby a majority voted to remain part of the United Kingdom. Brexit however has made changes in the quest for independence. There are some Scots who prefer independence with Westminster rather than Brussels. There are however also many who voted to remain part of the UK because they wanted to stay in the EU. It is therefore likely that the odds for independence have changed, though it is uncertain how much. He also emphasized how strange the debate is since it was initiated by one member of Parliament who was pro leave. More importantly however is the matter that the Scottish were promised a “UK-approach”. It is however perceived not as a UK but an English approach. It is vital that Scotland status plus democracy are safe guarded. Both the UK and the EU are not a one-size block. There are three important matters to be dealt with: safeguard of citizens’ rights, the budget and the Irish question. The Irish are rewarded for their loyalty by the EU but there is too little attention about the bad times. Despite these challenges the speaker ended with a positive note, stressing that there are solutions to be found, we just need to search for them.

Neale Richmond (Irish Senate) in turn gave his view that Brexit is the worst disaster to befall Europe since WWII. There will be a U.K. border despite the Northern Irish clear vote to remain and the clear priority to make the border the top priority. The Irish are and will remain on the EU side. It joined the EU as the act of a sovereign nation and will remain to be part of the EU. Despite the importance given to Brexit, Mr. Richmond also made clear that it is relative to where one resides. Referring to the Russian threat in the East and the refugee crisis in the south, he stressed how the importance of Brexit diminishes the further one travels away from the UK. Even though the EU has Ireland’s back, Ireland needs to keep pushing, because if all EU Member States want the best trade deal with the UK, not all of them rely on it. In relation to the border, Mr. Richmond emphasized that it was no longer possible to put in place a hard border. It is preferable to stay as close to the status quo as possible. It would be preferable to stay in the customs union or have a EU/UK customs border. In his closing statement he argued that the UK still does not recognize the damage that lies ahead. There is a delusionary vision that Brexit will have no impact on the economy. The ideal outcome would be to have a referendum and undo Brexit. If not, he urges the EU to keep the backdoor open or it might lead to an independent Scotland and Wales and thereby the fall of the UK. Concluding that Brexit is not going to be pleasant therefore we need to try and make it as good as can be.

After the conclusion, the panel was open for questions and answers. The questions concerned the disconnect between the EU & EU-citizens, and the danger of losing the rights guaranteed under the ECHR after Brexit.

Panel on Brexit and the border

The panel discussion of the event, chaired by Michael Brennan from Sunday Business Post, featured scholars and other actors interested in the topic.

The panel discussion was opened by John Doyle (Professor, Dublin City University), whose research focuses on peace agreements and, particularly, on the Northern Ireland peace process. Talking about Brexit with regard to the question on Northern Ireland, he explained that the issue of Brexit is vital for Northern Ireland, in so far as 60% of its GDP is accumulated from public sector. He noted that the existence of a weak private sector is typical to post-conflict situations. In addition, 9% of Northern Irish GDP is accumulated from EU funds, and 60% of exports are sent to the European Union. Talking about the peace process, Doyle pointed out that it was premised on all-island cooperation and integration. He also noted that it is much easier for both sides to cooperate if they both adopt standards which correspond with EU standard regulations. Some of these regulations are also explicitly mentioned in the Good Friday Agreement. Mr. Doyle expressed the concern that the changes happening due to Brexit will also lead to the establishment of a physical infrastructure on the border. Overall, Brexit could weaken human rights protections, disrupt North-South integration, turn Northern Ireland more towards the UK, and thus lead to slowed dynamic changes. A hard land border would have the worst possible consequences. Particularly, it would lead to economic disruption and consequently to a weak economy, as well as the disruption of the foundations of the peace process.

The panel discussion was continued by Dagmar Schiek (Professor, Queen’s University Belfast), whose research focuses on the unique socio-economic model of the EU and EU antidiscrimination law and policy. Her speech focused on European solutions for the island of Ireland. She noted that the integration on the island has been a success and the Union has an incentive to keep it. She touched upon the reasons why Brexit is an important issue for Ireland to consider. In particular, she pointed out that this is due to Ireland’s geographical location and the fact that it is geographically cut off from the rest of the Union by the United Kingdom, as well as due to the special relationship that exists between the UK and Ireland. Here, she mentioned the important role common EU membership has played in improving these relations. Talking about peace agreements, Ms. Schiek noted that common EU membership and the necessity to adhere to EU law, as well as the steps taken towards ensuring socio-economic integration according to the subsections on social and economic integrity have been preconditions for the peace process. The role that Union law has played for this socio-economic integration cannot be underestimated, due to the direct effect of EU law. Furthermore, she pointed out signs of the normalisation of relations, such as the increased trade between Northern Ireland and the Republic of Ireland or free movement of persons and the consequent migration process. In conclusion, she pointed out 5 tentative building blocks which should be taken into account when dealing with the issues of the relationship between Northern Ireland and the Republic of Ireland with regard to Brexit. Those blocks include a functioning internal market, the avoidance of a border for goods, the acquis communautaire on equality and citizenship (i.e. the non-discrimination clauses) and legal enforcement, inasmuch as EU rules are crucial to the integration process. It is worth mentioning that Ms. Schiek showed her disagreement towards the idea that there could be some flexibility allowed on the rule of law when dealing with the abovementioned issues.

Anne Marie Martin, the Chief Executive of the Council of British Chamber of Commerce in Europe (COBCOE) continued the panel discussion. She begain by noting that after the Brexit referendum a recent poll has demonstrated that 4 out of 10 of those who had voted in favour of Brexit would still prefer to lose their jobs than to vote for remaining in the EU, and that 6 out of 10 had been happy to go further with what Brexit offers and particularly, to ensure the sovereignty of the UK. Ms. Martin then presented the Brexit Ambition project, which was carried out over 9 months. The main aim of the project was to gather various business actors to discuss Brexit in the light of business interests, as well as to help ensure a safe and stable economic outcome for the global economy. The project, particularly, included a major survey to help determine key threats arising from Brexit. The findings of the survey demonstrated that many in business believe the UK to be an important part of the EU due to its open regulatory infrastructure. Other factors contributing to the UK’s role were, inter alia, the use of the English language and the fact that its capital, London, is a crucial asset for the economy. Regarding the issue of barriers to trade, businesses had mentioned several important points to be taken into consideration, such as the issue of tariffs and customs and the complexity surrounding the storage and movement of data. She noted that the participants consistently mentioned the importance of the impact Brexit will have on the free movement of people. In addition, much weight was given to the importance of minimising uncertainty and disruption in the Brexit process, noting that the management of those forms a crucial part of the process and discussion of the issues in question. Ms. Martin concluded that the main messages from European businesses were that either the Union or the governments are not listening to and paying sufficient attention to the concerns being raised and that there is a lack of understanding between the actors in the field. Moreover, while businesses have to cooperate within the process, they urgently need a predictable framework so that they can continue to compete globally. The importance of economy should not be overlooked in the Brexit process, as well as pragmatism, for the prosperity of Europe depends on successful economic relationships. To ensure these, the businesses believe that a collaborative approach towards the issues in question is needed, and that a result of no deal or bad deal will lead to undesirable consequences for everyone.

The panel discussion was then continued by Carlos Closa (Professor, Consejo Superior de Investigaciones Científicas), whose research focuses on EU integration and border issues. Prof.  Closa discussed the issue of the border between Gibraltar and Spain. He started by mentioning the divergent positions the UK, the Kingdom of Spain and the European Union have on Gibraltar. Particularly, the UK considers Gibraltar to be British overseas territory, Spain recognises it as a non-self-governing territory administered by the UK and pending de-colonisation process, and the EU sees it as a European territory for the external relations of which the responsible party is the UK. Despite being excluded from some areas of EU legislation, Gibraltar has received funding of 60 million euros between the years 1990 and 2016, and its GDP per capita is estimated by different organisations to be between 76.000 to 90.000 dollars per year. Talking about the relationship between Spain and Gibraltar, Prof. Closa noted that the border remained closed for a long time and opened only in 1985, in coincidence with the accession of Spain to the EU. The main areas of the relationship between Spain and Gibraltar include tourism, online gambling (with Gibraltar covering 60% of world online gambling) and labour mobility, with seven to fifteen thousand people crossing the border daily, while the population of Gibraltar is approximately 30.000. Moreover, Gibraltar often serves as an offshore tax haven. In addition, the relationship between Spain and Gibraltar also extends to the fact that Gibraltarians own a great deal of property in Spain and often reside in Spain, while keeping fiscal and formal residence in Gibraltar due to more beneficial fiscal conditions. However, the relationship has also troubling sides, considering that smuggling, drug dealing and bunkering are topical issues, especially since Gibraltar is often used as a means by drug dealers to avoid prosecution from Spain. Prof. Closa mentioned several possible outcomes on the issue of Gibraltar in connection with Brexit. He believes that the main issue both Spain and the UK would like to focus on is the free movement, which, in his opinion, may be retained across the Spanish-Gibraltarian border with occasional enforcement of border controls. In addition, he foresees the issues of financial services and online gambling to be part of a broader EU-UK agreement.

The panel discussion was followed by questions from the audience on various issues around Brexit, the internal market and questions on borders.

Concluding Keynote speech

The final point of the event was the concluding keynote speech by Pascal Lamy, former Director General of the WTO and former European Commission for Trade. Mr. Lamy started by pointing out the idea that if integration brings benefits, disintegration brings costs. He noted that the process of Brexit is legally and technically complex and economically costly. He then discussed the three scenarios he predicted to take place: (1) soft and long, (2) hard and short and (3) no exit, whether short or long.

Discussing the first scenario of soft and long Brexit, Mr. Lamy noted that the main complexity of the issue is with regard to the rights EU citizens will have in the UK post-Brexit, as well as with the future trade regime between the Union and the UK. He noted that any good deal and any compromise will take time, since it takes a long time both to negotiate and to implement the reached agreement. He believes that in case of a soft Brexit a 5+5 timeframe would be required, meaning that it will take 5 years to negotiate a deal and 5 years to implement it. Thus, soft Brexit will inevitably take a long time. In the case of the second scenario (short and hard), Mr. Lamy argued that with regard to trade regime there will probably be a situation where a trade-off on market access will take place, since third countries getting access to the British market will get an access to a much smaller market than they did before. In the third scenario (no exit), regardless of the shape it takes (a decision to extend the negotiation period, a decision of the British Parliament not to ratify the reached agreement etc.), the UK and the EU will end up in a situation where issues become more and more complicated.

In every scenario, Ireland will be an incredibly sensitive and difficult case to consider, due to political, historical and geographical reasons. Mr. Lamy talked about the idea that the issue of relations between Northern Ireland and the Republic of Ireland depends on the regulation of various issues between the EU and the UK and cannot be touched upon before an agreement on those is reached. However, Mr. Lamy does not agree with this view because, in his opinion, in any case the issue of border cannot be avoided and regardless of the trade negotiations between the EU and the UK, a border will have to be set up. This is due to the fact that when a country leaves an established internal market, borders have to be set, even if an agreement on having zero tariffs is reached. In a reply to a question on which scenario he considers to be the most likely outcome, he said that at the moment all three have an equal chance of taking place. The event ended with a discussion of questions asked by the audience on issues, such as the compatibility with WTO rules of having a border, the possibility of establishing a separate Customs Union and a discussion of the position of the UK.

 

 

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