August 17, 2017 / 10:50 AM / 5 months ago

Britain tries Trojan Horse trade tactic in Ireland

LONDON (Reuters Breakingviews) - The UK government is trying to send a trade Trojan Horse to Ireland. The European Union wants Northern Ireland’s knotty border issue resolved before Britain’s wider exit terms from the bloc can be agreed. New proposals from London deftly advance the government’s trade agenda, couched in concern for the region’s peace process. It may not work, but it’s smart, because having Dublin onside raises the chances of Britain getting what it wants.

A paper published on Wednesday laid out the British government’s detailed position on Northern Ireland for the first time. That should please Irish politicians, who have been pressing for plans of how exactly the politically sensitive border between the north and south of the island will look after Brexit. The answer is: much the same as it does today. British Prime Minister Theresa May wants the movement of goods and people to remain relatively unfettered after the UK’s March 2019 exit, with no return to a controversial physical border.

One idea is that small businesses, which comprised over 80 percent of north-to-south trade in 2015, not be considered international trade at all and thus exempt from restrictions. Larger corporations could self-declare, allowing them to travel freely back and forth.

Agreeing to such a lax setup at the EU’s only land border with Britain would be extraordinarily generous of Brussels. But claims that the UK position is “fantasy”, as EU parliamentarian Guy Verhofstadt claimed, may belie that there is some logic to what’s being proposed. First, favourable trade terms are couched in concern for Northern Ireland’s stability, since economic pain could exacerbate sectarian tensions in the region. Second, Britain and Dublin want the same thing, and Ireland is one of the most pro-EU member states in the bloc.

Where Britain is pushing its luck is in saying that the best way to make sure Ireland remains prosperous and open is to give the United Kingdom free and frictionless trade with the whole of Europe – but leave it free to negotiate other agreements with third countries. That will be hard to achieve. But using the Northern Ireland border, until recently an afterthought in 10 Downing Street, as a bargaining chip isn’t a bad way to make the case.


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