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Ireland's political and cultural magazine
7 4 April 2017
I
F 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 exam-
ple 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 accompa-
nied by Irexit. This thought may be so novel it
will shock many. EU membership has brought
Ireland good things. Most Irish people have pos-
itive 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 Eng-
lish-speaking world much more important for
the Republic than the EU26, with Britain gone.
INTERNATIONAL
The logic of following
the UK out
by Anthony Coughlan
Without the UK, the Republic
would be in a weaker
position to defend its low
company-profits tax, fishery
interests, trade interests,
distinctive Anglo-Saxon-
based traditions in law, and
its neutrality
Rialú
ghabháil
ar ais
April 2017 7 5
This is a consideration also for foreign inves-
tors 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 prof-
its tax, important for attracting foreign
investment, for which Germany and the Brus-
sels 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 mili
-
tary 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 poli-
ticians 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 “commu-
nautaire” 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 tradi-
tional 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 qual-
ity 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 nego
-
tiating 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 favoura
-
ble 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 signifi-
cantly changes.
Future Irish reunification in those circum-
stances 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 stay-
ing 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 secu-
rity matters to underpin a Brexit plus Irexit.
Anthony Coughlan is Emeritus Associate Profes-
sor of Social Policy at Trinity College Dublin.
If the South
stays in the EU
while the North
leaves, Britain would gain a
new “strategic interest” in
staying on in the North
The Republic sends 61% of
its goods exports to
countries outside the
continental EU26, mostly
English-speaking.It gets
two-thirds of its imports
from outside the EU26.
In 2015, the most recent year for which Central Statistics Office figures are available,the
Republic exported €112bn worth of goods and imported €70bn. It exported €122bn worth of
services and imported €151bn. The tables show the distribution of this tradeby area.
Distribution of Irish foreign trade in goods, 2015
10%
20%
30%
40%
50%
60%
70%
39%
34%
61%
66%
14%
26%
25%
16%
39%
42%
EU26 without
the UK
Rest of World
including UK
UK USA and
Canada
USA and Canada
+the UK
Distribution of Irish foreign trade in services,2015
10%
20%
30%
40%
50%
60%
70%
34%
28%
66%
72%
20%
8%
11%
21%
31%
29%
EU26 without
the UK
Rest of World
including UK
UK USA and
Canada
USA and Canada
+the UK
Exports Imports Exports Imports
61%
Sources: CSO Statbank, External Trade, Tables TSA01 and TSA05, CSO International trade in services 2015, Table 2A
