How Brexit will affect Ireland

Britain’s vote to leave the European Union has left both parties in uncharted territory, plagued by uncertainty and, even, enmity.

Prime Minister Theresa May’s call for Britain to be accorded the benefits of the single market without being obliged to abide by its rules and regulations has antagonised key EU figures, and may make them all the more determined to make certain Britain suffers a “hard” Brexit, the “clean break” she has proposed.

Furthermore, her threat to terminate relations if the EU rejects her demands could backfire.

The divorce, the first in the EU, is likely to be bitter and contested because the majority of the other 27 EU members want to avoid further desertions and costly divorces. 

The common view is that Britain should not enjoy all the benefits of EU membership from outside the EU while shunning all obligations.

May would like to have a win-win Brexit, but the country’s withdrawal could become lose-lose for both parties.

Germany’s daily Die Welt accused May of leading Britain into “isolation”. 

Without admitting it explicitly, she has capitulated to Britain’s “tight little island” syndrome. 

Her timing is terrible as the international community has moved beyond borders and into globalisation, for better or worse.

This is a lesson that the other isolationist, across the Atlantic, Donald Trump, will have to learn as well — the hard way.

The country to be most affected by Brexit is Ireland, the Republic in the south and the six counties annexed by Britain when the Republic emerged from the occupation in 1922. 

While the majority of citizens in the Republic of Ireland urged Britain to remain in the EU and 56 per cent of voters in Northern Ireland cast their ballots in favour of remaining, May has, apparently, ignored Ireland as a whole while deciding to opt for “hard” Brexit.

For Ireland and Britain, membership in the European Union resolved some of painful aspects of partition.

The 1998 the “Good Friday Agreement”, which created Northern Ireland’s power-sharing government, was based on EU membership of both Britain and the Republic of Ireland.

It is not clear how Britain’s exit from the EU will affect this arrangement.

The eruption of a political crisis in Northern Ireland is already impinging on Britain’s triggering of the Brexit process, set for the end of March. 

On January 9, the Northern Ireland power-sharing agreement between the Protestant Democratic Unionist Party and Catholic Sinn Fein broke down after Deputy First Minister Martin McGuinness resigned in protest against corruption.

His withdrawal has forced the Northern Ireland Assembly to dissolve and call an election on March 2. 

A delay in triggering Brexit could come because the new assembly has to meet, form a government and discuss May’s exit bid before it can be launched.

There are fears in Northern Ireland that May is more interested in divorce from the EU than the welfare of the province and the preservation of power sharing.

This is endangered doubly by Brexit and the breakdown of the fragile partnership between the Unionists and Sinn Fein.

Brexit will have a serious political cost for the North: it will no longer receive EU subsidies for programmes promoting ties between Protestants and Catholics.

While the Common Travel Area permitting citizens of the Republic and Northern Ireland freedom of movement is likely to be retained, Brexit could build walls against goods and services.

May said Britain would negotiate new customs deals with the EU with the aim of preserving tariff-free trade. 

If she fails, customs checks along the north-south border could be installed.

Northern Ireland’s opposition leader Colum Eastwood said  “nowhere will be more damaged” by Brexit than Northern Ireland.

The Republic began to suffer from Brexit as soon as voters in Britain cast their ballots.

During the last six months of 2016, Irish food and drink exporters lost 570 million euros ($604 million) following the fall in the value of the British pound vis-à-vis the euro.

The British market for Irish produce is expected to shrink further this year.

The Republic’s department of finance estimated that May’s Brexit would reduce exports to Britain by 30 per cent and drive 40,000 people from jobs over a decade.

The economy would shrink by 3.5 per cent in five years, and by 4 per cent in 10. 

While the Republic’s farmers could continue to be harmed, losses in exports could be partially compensated by gains in the banking and business sectors.

UK, US and Asian banks and firms based in Britain are examining the prospects for relocating to the Republic with the aim of retaining access to the European single market.

Many firms also seek to benefit from Ireland’s 12.5 per cent corporate tax rate, which is low for the EU and an incentive to relocate to the Republic.

Banks and companies regard Dublin as a suitable replacement for London because English is spoken.

Northern dairy farmers could be compelled to close down after Brexit if trade barriers with the Republic are renewed.

Not only would dairy products disappear from the shelves of the Republic’s supermarkets, one-third of Northern Ireland’s milk production could cease to cross the border for processing into butter, cheese and baby milk in the Republic.

Delays caused by tariffs, customs checks and red tape would make it impossible for the North to export its raw milk to the Republic.

It would take time for the North to build new facilities to process the volume of milk now exported to the Republic.

Three months before resigning, McGuinness urged Belfast and Dublin to press the EU to make special provisions for Northern Ireland, perhaps grant the province associate status.

Unfortunately, senior Unionist leaders, who had backed Brexit, did not act on his call for cooperation.

Indeed, outgoing First Minister Arlene Foster welcomed Brexit although many members of her party did not, due to the risks posed to the province by Brexit.

McGuinness suggested Sinn Fein and dissident Unionists get together and follow the example of Scotland, which has threatened to secede from Great Britain and Northern Ireland and apply for EU membership.

This is unlikely to happen, leaving northern and southern Irish suffering the fallout of a vote cast in a rued referendum last summer.