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The logic of following the UK out

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.

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  • SaoirseNíChrualaoich

    This article reads as either extremely uninformed at best, or actively misleading at worst. There is no scenario in which Irexit would make Ireland better off than it is now. It’s simply wrong to think Irexit would fix the mess around the border, customs controls, tariffs and so on which the British have created. Every single one of those issues would still exist after Irexit, and we would magnify them so that they affected ALL our exports and foreign trade, not just the 15% we send to Britain.

    Ireland is an EU member because we gain so much from membership. We have moved from being a poor, powerless satellite of Britain to a global, proud country that exports around the world. The UK wants us out so they can return to the predatory relationship where they won and we lost in every single trade deal, simply because they’re so much larger than we are. There are a vast number of positive reasons to stay in the EU – shared democratic values, better trade deals around the world, a vote and veto over issues which affect us – and no good reasons to leave.

    As for the claims that leaving would actually net us cash (instead of a recession due to massively depressed demand once foreign capital moves back to the UK), that Irexit would bring more FDI (not less, as companies no longer have any good reason to invest in Ireland instead of the far larger UK), or, laughably, that it would bring us more security over taxation (as the first demand of any country when we go cap in hand to beg for a trade deal would be for us to raise our corporate tax rate to the same level as them), I can only assume that the author meant well but has not seriously thought about how much Irexit would harm Ireland.

  • endorendil

    A novel thought? Irexit was discussed last year already. It makes even less sense for Ireland, which depends even more on EU trade than the UK. The farmers that will sell less to the UK will find it easy to sell their excess products in the EU, where British farmers can’t easily flog their products anymore.

    Britain’s “traditional cheap food policy” was abandoned more than 4 decades ago, and under the current WTO trade regime, it is not easy to implement. The same WTO will not make it easy for the UK to support its farmers. Some parts of the CAP depend on the AMSS allowance that the EU has as part of its WTO schedule, allowing it to engage in a limited amount of market-distorting subsidies. The UK will have to negotiate its own AMSS, and that will be fought tooth and nail by other WTO members, even if the EU would present it as a “split” of its allowance (requiring a lot of goodwill at the EU).

  • David Webb

    Come on Ireland – join the world!

  • SaoirseNíChrualaoich

    We’ve already joined the world David, thanks to the EU. Before we joined, Britain controlled over 80% of our trade. Nowadays, it only holds 15%. The EU has made us truly global!

  • Paul Mead

    it’s not a matter of Britain controlling 80% of our trade, they didn’t, they purchased goods from us as it made sense to do that, it still does. The majority of our goods for export to the EU goes via Britain, are we seriously saying that we need to seek alternative routes, the costs of this would leave us seriously disadvantaged economically. The British have chosen to go, they have not pressured us into joining them, they won’t reintroduce a hard border & its a very serious downside for us if the EU are so intransigent on forcing a hard brexit as a move to WTO rules would destroy our export market to them, unfortunately I have already given up hope of a meaningful deal between the EU & UK, the childish antics of Herr Juncker insult our intelligence, to hold a press conference in French to show that English is on the wane as a language, there are approx 1.25 billion English speakers to 275m French in the world today, virtually all world trade is conducted in English. These idiots are out of touch with reality, their ship is sinking, its time to man the lifeboats & make sure we don’t go down with them

  • Paul Mead

    i doubt it, for an economy like GB to go to WTO rules will damage world trade as they are great consumers like the US, GB is not inhibited by the EU & a great deal of goodwill will need to be shown by both sides, already Australia & Canada are encouraging them to join NAFTA, Trump will be welcoming them with open arms, we need to protect our market not the EUs, they will simply import more from Africa, Middle East, Far East, S America et al. Large swathes of the UK water/rail companies are owned/run by EU monopolies, if the EU want to sacrifice these, that’s there problem, Argentina has been silent on Gibralter, they want to ratchet up their beef/wine goods 500 fold in exports to the UK & would happily replace our farming/french wine exports with their own goods, well if Juncker wants to play hardball, it will be our loss

  • Anonymous

    Actually it’s not due to Ireland joining the EU, but the US. Being in the EU puts unnecessary trade barriers w/ the US. Plus with Brussels imposing its high tax regime on Ireland it will make the Irish economy uncompetitive (the Apple tax case). Have a look here:

  • Anonymous

    What about Brussels imposing higher taxes on multinationals companies in Ireland? The Apple thing?

  • bobrob22

    How on earth can you say the UK wants you out. I can honestly say that in the many varied discussions I have had over the past year or two with countless people, about the referendum, I have never once heard a single comment about Ireland let alone anybody saying they want them to leave the EU. It simply hasn’t been in anybodys thoughts.

  • archie l. o’chus

    Crucially, when the Brits were given the vote as to whether or not they should leave the EU the Irish ‘problem’ was never mentioned… therefore surely they were given the vote on a false basis? I mean the picture painted, the facts placed before the voters, was partial and biased because, quite simply, it excluded mention of the repercussions for Ireland. A referendum given to a peoples on such a basis has to be a non-starter. The referendum result should therefore be cancelled and a fresh one given, only this time with the issue of the north-south with all its problematics at the forefront of the proceedings.