If Britain leaves the EU single market and customs union while the Republic stays in the EU, the North-South border within Ireland will become an EU land frontier, with customs controls inevitable and possibly passport controls. EU-based laws and standards, for example in relation to crime and justice, would prevail in the South and British-based ones in the North.
Logically therefore the only way to avoid adding new dimensions to the North-South border post-Brexit is for Brexit to be accompanied by Irexit. This thought may be so novel it will shock many. EU membership has brought Ireland good things. Most Irish people have positive attitudes towards it. But if the North is leaving the EU along with Britain we should be able to consider dispassionately the advantages of leaving too – and the drawbacks of remaining in it without the UK as a fellow member.
Irexit clearly has some benefits. It would save us money for one thing. Since 2014 the Republic has become a net contributor to the EU Budget: for the previous forty years we were major net recipients of EU cash, mainly through the EU’s Common Agricultural Policy. From now on money from Brussels will be Irish taxpayers’ money recycled, as is already the case with the UK. This removes what hitherto has been the principal basis of Irish europhilia, official and unofficial – namely cash. That has always been more important here than ideological enthusiasm for Eurofederalism or ‘the EU project’.
If the Republic remains in the EU post-Brexit it will have to pay more to the EU Budget as its proportionate contribution to help compensate for the loss of the UK’s annual net payment. On the other hand a bonus of leaving is that we would get our sea fisheries back. The value of annual fish-catches by foreign boats in Irish waters is a several-times multiple of whatever money we have got from the EU.
As regards trade and investment, the Republic sends 61% by value of its goods exports and 66% of its services exports to countries that are outside the continental EU26, mostly English-speaking. It gets two-thirds of its imports from outside the EU26. The USA is the most important single-country market for the Republic’s foreign-owned firms and the UK for its Irish-owned ones – the latter being especially important for employment. The UK and US markets together are comparable in importance to that of the EU26 post-Brexit. Taking other English-speaking markets into account makes trade with the English-speaking world much more important for the Republic than the EU26, with Britain gone.
This is a consideration also for foreign investors coming to Ireland. Economically and psychologically, Ireland is closer to Boston than Berlin, and to the UK than Germany. This puts exaggerated talk of the EU’s ‘giant market of 500 million’ in perspective. That shrinks anyway to 435 million with the UK gone. Some 7 billion people live outside the EU.
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 Republic, the EU and the UK in the context of any Brexit or Irexit.
Without Britain beside her in the EU Council of Ministers the Republic would be in a weaker position to defend its low rate of company profits tax, important for attracting foreign investment, for which Germany and the Brussels Commission are now gunning. It would be less well able 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 staying in the EU when the UK leaves is the negative one that we are members of the Eurozone while the UK is not. When the euro was established in 1999 our politicians decided to adopt the currency of an area with which we do just one third of our trade. They thought at the time that Britain would be bound to adopt the euro-currency too and that by going first they would show how “communautaire” they were. 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 hitting its exports and encouraging competing imports. Failing that the North-bound shopping queues will grow.
This is why Dublin should aim to leave the Eurozone and re-establish an Irish currency in a planned concerted manner, negotiating its departure with Germany, the UK and the ECB 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 some future Eurozone financial crisis.
The UK will presumably revert to its traditional cheap food policy when it leaves the EU. Contrary to some Irish commentary, there is nothing immoral in a country importing its food from wherever in the world it can buy good quality products cheaply. At the same time the British Government will want to support UK farmers for political reasons, presumably by means of direct farm subsidies to replace the price supports they now get from the EU’s CAP.
Nearly half the Republic’s agricultural output goes to the UK market at present, so such a development will have major implications for us. Will Irish farm producers be displaced in the UK market post-Brexit by New Zealand lamb, Brazilian beef, American chicken etc?
These are the main reasons why the focus of intelligent Irish policy should now be on negotiating a comprehensive deal with London for this State to leave the EU along with the UK, while maintaining maximum free trade with both EU and UK post-Brexit. Such a deal should guarantee continued free access for Irish food exports to the UK market on the most favourable terms. It should also cover Bank of England support for a restored Irish pound so that it did not have to devalue excessively in the initial weeks following its re-launch.
The security dimension of Brexit is relevant here. The end of the Cold War removed the need for Britain and NATO maintaining military bases in the North. This was the basis of London’s statement that it had “no strategic interest” in Ireland and its commitment under the Downing Street Declaration and Good Friday Agreement to facilitate Irish reunification when and if a majority in the North should come to favour that. But if the South stays in the EU while the North leaves, this security calculus significantly changes.
Future Irish reunification in those circumstances would mean the whole island would become part of an EU military security bloc dominated by Germany – now openly talking about a Brussels military HQ and an EU army – and potentially hostile to British interests in some future international crisis. This would give Britain a new “strategic interest” in staying on in Northern Ireland and actively discouraging any moves to Irish reunification.
Britain has an interest in preventing these developments, as indeed has the Republic. The logic of the new situation posed by Brexit points to the desirability of a comprehensive Anglo-Irish deal covering economic and security matters to underpin a Brexit plus Irexit.
Anthony Coughlan is Emeritus Associate Professor of Social Policy at Trinity College Dublin.