A botched border will be bad for all .

It’s the EU that wants the wall not us – and I wish that our politicians pointed this out more often. The UK and Ireland governments have made great strides in trying to reach a settlement for Northern Ireland and this could unravel  if the  EU are not pragmatic in their approach to the Northern Ireland.

In some recent coverage on the radio along the Northern Irish border there was lots of talk of not wanting the return of the “watchtowers” and the “troops” along the border as we had during “The Troubles” between 1968-1998.

And what irks me about this is two-fold – firstly the UK voting to leave the EU  does not mean we have to put up a military presence along the NI border. The Troubles are long  over and many of the reasons for having the military border have gone.

The second reason and the most important of the two – if the EU insists on a hard border it will not have been imposed by the British, but by the EU. There is not a lot of support for this anywhere in Ireland and the UK government should continue allow Irish citizens to pass freely into the UK,  as they have been able to do so.

Imagine  a scenario where the UK keeps the border much as it is now  – open. And the EU build a customs border on their side. It would not be the UK causing security and customs delays. Instead it will be the EU forcing a border on the Irish mainland. Irish haulers and government would then have to lobby/petition at an EU level to remove the log jam of goods crossing into UK and back again. In this situation the UK position at an EU level would be weaker and we would have to allow the Irish to do our bidding.

The EU fears by keeping an open border between themselves and the UK , that goods from let’s say, America,  could creep into the EU. The UK could simply mandate that all products be labelled as made in the USA like we do already , and then simply let the consumer choose. If they want beer made in Germany with a Texan steak who are we to get in their way ? If free trade is good across the EU then why is it any worse if  we just extend that boundary to include the globe ?

This logic reveals the EU for what it really is, an intra-nation free trade area with a common tariff  border to the rest of the world. As opposed to an international free trade area .

The British and Irish governments have long had a common travel area (CTA) which allows for easy movement of people dating back to 1925 – well before the creation of the EU. Therefore is no reason why an agreement could not be reached on goods crossing the border now.  Electronic customs solutions for goods already exist,  adopting blockchain technology could be used to ensure that there is an accurate record of what has crossed the border. There is no point in re-inventing the wheel for customs clearances , we should adopt technology in lieu of border bureaucrats.

There is nothing that stops the EU making an exception in this case . Such exceptions are already in place along border between Norway and Sweden, and the border between Germany and Switzerland. Both of these borders have components which could be incorporated into creating a no border situation. Not only would this be helpful for NI, but the UK as a whole. Any solution used by the UK and the EU could always be used a template for other accession countries or be used with other nations who want to trade with the EU bloc but want to avoid political entanglements. 

As final thought, replacing my economics hat with a political one, we have to consider the actors and their intentions. The border could well be used by Politicians on both sides as a stalking horse.

The Irish could demand that they will forgo a border as long as NI adheres to the same regulatory standards as the Irish have. This would mean that the EU has a border inside of the UK. I doubt that Westminster would go for that. But for the Irish government this would be a win as it would bring NI closer into their sphere of influence; perhaps even realising their dream of a united Ireland again.

On the UK side the threat to build a wall may well force the Irish government to compel  the EU negotiating team to give concessions such as passporting for financial services or generous access to single market etc.

Perhaps this is the real reason that power is not going back to the NI assembly – maybe an ace up May’s sleeve.

 

I must stress that there was farming in the UK well before the creation of the EU.

There have been long-established trading relations all over the world particularly within the commonwealth . It sounds blistering obvious, but it is worth iterating this point as some articles published sound as though we would be left without food altogether.

Many companies here in the UK go to great lengths to state their food is made here in the UK , I can not imagine that this will go away anytime soon, perhaps some canny businesses will continue to leverage this one further.

The loss of farming subsidies and price controls understandably would be a worry to many farmers especially when their existence can be so precarious , but with ingenious thinking and  some changes in regulation these are problems that can be solved.

What would farmers do apart from farm….?

Some of the land could be moved over to housing as much as NIMBYs protest about excessive house building over the UK , such a small percentage of the country is built on “The urban landscape accounts for 10.6% of England, 1.9% of Scotland, 3.6% of Northern Ireland and 4.1% of Wales.” (http://www.bbc.co.uk/news/uk-18623096) .First on the build list should be farms adjacent to existing housing projects, second on the build list would be the plots of land that were kept profitable due to subsidies or price controls these were most like to have been marginal in the first instance.

The government could also push to remove all the unnecessary administration and regulations that are currently coming from the EU. This would free up farmers to do what they do best which is farm and seeks new markets for goods or to use the land in a new and novel ways.

It is possible to remove all farming subsidies and produce more food at less expense to the taxpayer , who in fact get stung twice one through their taxes and the second through higher food prices. A real world example of this NZ where all farming subsides were removed 34 years year ago ,if anything it seems to have reinvigorated their farming industry (http://news.bbc.co.uk/1/hi/programmes/from_our_own_correspondent/3747430.stm) , if an economy the size of New Zealand can perform such a change , there is no reason why the UK which is much larger economy could also not survive with out farming support

What about making all the food that we need here in the UK ? I don’t want to get into the meat (pun intended) of comparative advantage you can look that up yourself , but needless to say it makes no sense trying to make watermelon here in the UK considering our climate the amount of energy required would not be a good use of scarce resources. It makes much better sense for us to produce where we have an advantage such as making potatoes/financial services/design and engineering etc and trade them for watermelons from a countries where they make them with relative ease .

This sort of trade also allows developing nations to trade their way to prosperity as opposed to waiting for grants from first world nations . Which will come with inevitable strings attached. Trade is much simpler and bottom up way of helping individuals and nations out of poverty. As opposed to the top down method which is fought with money leaking a way to pay bureaucrats with very little making its way to the those most need it. We could do away with departments such DFID and have that money spent here at home or left with the taxpayer.

If we were to be true to our Cobden (google corn laws for more on this much forgotten British free marketeer) core ,then we would also not worry about who makes our food the UK would have the ability to trade outside of the customs union with everyone. The whole world would be able to trade food with us in return for all the goods and services where specialise . As many of the countries outside of the EU would be able to send us food more cheaply (not in all cases I conceded as they may not have scale but that could happen over time as the developing world would accumulate capital from the goods they have sold to us) .

A post Brexit Britain (or just Britain returning to nation-state which is self-governing like most other countries in the world) we need to this as an opportunity to allow all areas of the economy to flourish and experiment (one of the reasons not to integrate all EU law into UK law IMHO) with new ideas and solutions you never know what we may just come up with.