Why All The Fuss Over Northern Ireland’s Trade?

News this weekend suggests Britain’s Prime Minister Rishi Sunak is close to cutting a deal with the European Union over how to administer trade across the border with the Republic of Ireland.

History shows why the last thing either Ireland (inside the EU) or Britain (outside the EU) want is a traditional border with customs checks and passport control. Warring factions from both sides created mayhem for decades resulting in the deaths of many people in Northern Ireland as well as on mainland Britain.

Clearly that scenario shouldn’t be repeated. But a so-called hard border may reignite a militaristic campaign once again in the province following more than two decades of relative peace since the Good Friday accord.

That’s a lot the reason why the negotiations have been heavy going. The stakes regarding maintaining peace are high for Britain and Ireland.

The peace stakes are less of an issue for the EU bureaucrats. They seem to be more focused on compliance, for its own sake, and perhaps some revenue collection from imports into the EU.

However the revenue in question is tiny, for large bloc like the EU. That’s largey because Northern Ireland’s economy is small.

The consequence is that Northern Ireland’s trade with Ireland totals a mere GBP 5.2 billion (approximately $6 billion) and to the rest of the EU the figure is GBP 2.6 billion.

Overall the tariff revenue to the EU is likely to be minimal. The average trade weighted tariff rate for imports to the bloc was a mere 1.48% in 2020. That would mean the EU would collect a mere GBP 115 million. My educated guess is that they’d collect almost as much if exporters were asked to self-declare.

In any event, these are minute figures. So its a wonder why the EU would bother implementing anything other than a system of self compliance which is occasionally audited.

What doesn’t make sense is why the EU won’t just let it be and let the border be open without adding a slew of bureaucracy to what will likely be minimal trade across the NI/Irish border.

Maybe its control or perhaps its to punish Britain for following the wishes of their voters. Whatever the reason it seems like a waste when fewer trade restrictions would be a benefit to the EU and Northern Ireland alike.