Skip to main content

How to Leave the EU

Leaving the EU is as complicated as the UK wishes to make it.

The simplest plan for Brexit would be to extend the existing customs rules for the world in general to the EU, with special provision for Ireland.  The NI problem is discussed in depth here.

There is a great deal of confusion sown by the Remain campaign about the tariffs that would be payable to the EU and paid by the EU after Brexit but the facts are simple, most UK exports to the EU attract very low tariffs (c.4%), even cars only attract 10%, on the other hand, EU exports to the UK attract higher tariffs because they involve foodstuffs. The  EU will be paying £12.9bn pa in tariffs against the UK's £5.2bn.  The UK has a Balance of Payments Crisis with the EU and in these circumstances the WTO accepts that subsidies may be paid to UK food producers and car exporters.  The WTO option is viable, simple and involves little more than raising the investment in UK Customs Services by 40%.

EUmfntariffs 

Bulk of UK exports lie in the red boxes. Source:  WTO

The WTO option is discussed in depth in The WTO Option after Brexit and The EU Single Market - Good or Bad for the UK?. Click on the links to read the articles.

The advantage of this WTO option for Brexit is that it relieves the EU of almost any role in leaving and the UK Government can decide what it will pay the EU, if anything.

The position of Northern Ireland is particularly problematical in almost all versions of Brexit.   The constraints on solving this problem are how to have Brexit for the UK and keep the relations between the North and South of the island of Ireland almost the same as at present.

According to Sinn Fein this would entail Northern Ireland having a special status within the UK and the EU as a new sort of Associate member of the EU for the purpose of trade and travel. The DUP also want special status, with a free travel area and no overt border controls but recoil from the title "Associate member of the EU"  or "region with special status" because it is a psychological step towards Irish Nationalism.

The Northern Ireland problem on Brexit can be solved.  There are two ways in which tariffs might be charged.  Tariffs could be chargeable on all goods imported into Northern Ireland except those from the rest of the UK or there might be an EU-NI free trade zone.  The DUP is probably only amenable to the first option.  The central problem is that of fraud because any tariffs and customs procedures would need to operate on the principle of businesses declaring their transactions so that border controls are avoided. Yes, the only simple way to avoid border controls in NI is self-certification of customs. Whichever solution is chosen it is not mission critical, only food and car exports and imports are significant at present because tariffs are very low on other items. This means that Customs procedures can focus on these in the first instance.

Given that Northern Ireland only exports about £10.7 billion to the rest of the UK there is considerable scope for flexibility. Even in the worst case fraud in Northern Ireland is unlikely to damage the UK economy and systems can be put in place to prevent as much fraud as possible. The way forward is to have declarations of purchases from the EU by NI businesses and random inspections by Customs.  HM Customs would spot check business declarations and inspect very large shipments of Northern Ireland produce to the UK to ensure that there is no re-badging of Eire/EU produce.  This solution would be sensible checking of the veracity of self declaration, not putting a border in the Irish Sea.
The business declarations might have a £500 lower limit to avoid excessive bureaucracy. Eire might institute a similar regime for inspection of NI goods entering Eire. Occasional investigations of the extent of fraud and other costs would be needed to ensure that fraud was not getting out of hand.

The solution outlined above is obviously going to cause enforcement problems but these can be largely overcome and losses will be small. The imperative would be to stop any large scale fraudulent importing of goods into the UK in general and this should be possible because all such movements would occur through ports and airports which already have a Customs presence that can implement spot checks on self declarations.  Don't let Civil Servants derail Brexit just because any solution will not be perfect.  There are no perfect solutions to the difficulties on the island of Ireland.

The Remain media have been exaggerating the difficulty of leaving the EU but it is actually very simple: the UK leaves and deals with any problems like Northern Ireland on an ad hoc basis beforehand.  After leaving the various separation payments can be discussed.  Make no mistake, transition periods and separation payments are all part of a Remain strategy to derail Brexit.


(Any solution to the NI problem that has open borders with Eire and does not have free movement of trade, capital and people must involve self declaration and spot checks. It is logically inevitable if fraud and mass migration across the border are to be controlled.  Also note that the Good Friday Agreement does not oblige the UK to maintain open borders with the Republic of Ireland - click on the link if you do not believe this).





Comments

Popular posts from this blog

The Falklands have always been Argentine - Las Malvinas son Argentinas

"The Falklands have always been Argentine" is taught to every Argentine child as a matter of faith.  What was Argentina during the time when it "always" possessed Las Malvinas?  In this article I will trace the history of Argentina in the context of its physical and political relationship with "Las Malvinas", the Falkland Islands.  The Argentine claim to the Falkland Islands dates from a brief episode in 1831-32 so it is like Canada claiming the USA despite two centuries of separate development. This might sound like ancient history but Argentina has gone to war for this ancient claim so the following article is well worth reading. For a summary of the legal case see: Las Malvinas: The Legal Case Argentina traces its origins to Spanish South America when it was part of the Viceroyalty of the Rio del Plata.  The Falklands lay off the Viceroyalty of Peru, controlled by the Captain General of Chile.  In 1810 the Falklands were far from the geographical b

Practical Idealism by Richard Nicolaus Coudenhove-Kalergi

Coudenhove-Kalergi was a pioneer of European integration. He was the founder and President for 49 years of the Paneuropean Union. His parents were Heinrich von Coudenhove-Kalergi, an Austro-Hungarian diplomat, and Mitsuko Aoyama, the daughter of an oil merchant, antiques-dealer, and huge landowner family in Tokyo. His "Pan-Europa" was published in 1923 and contained a membership form for the Pan-Europa movement. Coudenhove-Kalergi's movement held its first Congress in Vienna in 1926. In 1927 the French Prime Minister, Aristide Briand was elected honorary president.  Personalities attending included: Albert Einstein, Thomas Mann and Sigmund Freud. Figures who later became central to founding the EU, such as Konrad Adenauer became members . His basic idea was that democracy was a transitional stage that leads to rule by a new aristocracy that is largely taken from the Jewish "master race" (Kalergi's terminology). His movement was reviled by Hitler and H

Membership of the EU: pros and cons

5th December 2013, update May 2016 Nigel Lawson, ex-Chancellor of the Exchequer,  recently criticised the UK membership of the EU , the media has covered his mainstream view as if he is a bad boy starting a fight in the school playground, but is he right about the EU? What has changed that makes EU membership a burning issue?  What has changed is that the 19 countries of the Eurozone are now seeking political union to escape their financial problems.   Seven further EU countries have signed up to join the Euro but the British and Danish have opted out.  The EU is rapidly becoming two blocks - the 26 and Britain and Denmark.   Lawson's fear was that if Britain stays in the EU it will be isolated and dominated by a Eurozone bloc that uses "unified representation of the euro area" , so acting like a single country which controls 90% of the vote in the EU with no vetoes available to the UK in most decisions.  The full plans for Eurozone political union ( EMU Stage