terça-feira, 21 de fevereiro de 2017

Ireland’s Brexit meltdown

Ireland’s Brexit meltdown
There’s doom and gloom on the other side of the Irish Sea.

By CHARLIE COOPER 2/22/17, 4:32 AM CET Updated 2/22/17, 4:45 AM CET

DUBLIN — Forget about the Brexit upside. Just weeks before British Prime Minister Theresa May is expected to pull the trigger which begins divorce negotiations, Dublin is convinced that Britain’s departure from the EU will be disastrous and is desperate for the rest of Europe not to forget its plight.

The turning point was May’s admission that Britain intended to leave the single market and probably the customs union, delivered in a speech at Lancaster House in London in January, which set out the prime minister’s vision for a United Kingdom outside the EU.

“We genuinely believed that Britain would not want to walk away from the single market,” Danny McCoy, CEO of the Irish Business and Employers Confederation (IBEC), told reporters at a Brexit dialogue event hosted by the government in Dublin Friday. “We are now confronting the reality of Ireland being in a different customs union to Britain. For the business community that’s by far the biggest issue.”

Tariffs would be “devastating” for goods exporters, while regulatory inconsistencies could cause havoc in Ireland’s pharmaceutical and med-tech industries, McCoy predicted.

The Irish government shares business leaders’ concern that the economy is so intertwined with the U.K. — its second biggest export partner after the U.S. and its biggest importer — that a punitive Brexit deal that erects trade barriers between the EU and the U.K. will hurt Ireland at least as much as it does Britain. Dublin therefore is preparing to be Britain’s best friend among the EU27, pushing for the closest possible trading links, or at the very least special status for Northern Ireland.

London, Dublin and Brussels are united in their warm words for people here. On Tuesday European Commission First Vice President Frans Timmermans became the latest to visit Dublin, promising Brexit negotiations will take into account Ireland’s “very special circumstances.”

All say they are committed to preventing the return of a hard border. Few business or community leaders believe the platitudes. If the U.K. is out of the customs union, the argument goes, how can it be avoided? Government officials are equally pessimistic, and point to the words of ex-European Commission customs official and trade expert Michael Lux, who told a Westminster committee earlier this month that May’s assurances about a frictionless border were mere “nice words.”

While Dublin still hopes to secure a boost to its banking sector by guaranteeing continued single market access to companies leaving Britain and is hoping to attract the European Medicines Agency if it relocates from London, the overall economic harm to the country from a hard Brexit will outweigh the positives, the government projects.

Dublin has been proactive in getting its message across to the remaining EU27. Foreign Minister Charlie Flanagan has held more than 80 meetings since July with EU partners and EU institutions. Last week, to ensure European capitals have not missed the point, the government arranged for 11 news organizations from Brussels, Paris, Berlin and Rome (including POLITICO) to tour the border and see first-hand what Brexit means for the Irish.

‘That’s when the shooting starts’

A visit to a dairy processing plant in Monaghan on the south side of the border, run by LacPatrick, a company supplied by 1,050 farms in both the North and the South, crystallizes the acute threat to the local economy.

Agriculture on this island operates to an “all Ireland” principle. Livestock and farm products cross the border daily for slaughter, processing and distribution. LacPatrick has two factories in the north, one in the south. Some of its supplier farmers have cows on both sides of the border.

LacPatrick’s chief executive Gabriel D’Arcy now faces the prospect of an international customs border cutting through the middle of his patch.

“The way we operate across the border is seamless. Now it is going to be an international frontier,” he said. Many British supermarkets and distributors he supplies are now seeking domestic alternatives, to avoid the risk of customs duties. Trade further afield is also at risk.

“What about regulatory standards? The Chinese are very, very pedantic. They have approved EU milk as a raw material. They haven’t approved U.K. milk. So we have to go into a big cycle where veterinarians from the Department of Agriculture in China are going to have to come over to approve it. Where is that going to be on the U.K.’s list of priorities?”

Irish agriculture could be one the biggest losers anywhere in Europe. Forty-three per-cent of Irish agri-food exports go to the U.K. If there is no Brexit trade deal, and the U.K. relies on World Trade Organization rules, nearly €1 billion in annual dairy exports would be subject to a 40 percent tariff. €1 billion in annual beef exports would be hit by 50 percent levies, said Michael Creed, Ireland’s agriculture minister, describing such levels as potentially “calamitous” at the dialogue event Friday.

For others in the farms and villages of County Armagh, Northern Ireland, the prospect of the reintroduction of a hard border reignites memories of this region’s violent past.

The prospect of Brexit speeding a return to violence along the Irish border — once a militarized zone, today merely a line on a map — may seem far-fetched. But it is being taken seriously by the people who live here, and by the government in Dublin.

Standing outside the house he once lived in, in the border village of Whitecross, Eugene Reavey recalls the night 40 years ago when three of his brothers, Catholics, were murdered in their own home by Protestant Ulster loyalist paramilitaries, at the height of the Troubles.

Now an old man, Reavey surveys the eight miles stretching toward the Republic of Ireland and contemplates what a “hard border” might mean.

Customs checkpoints would become prime targets for attacks by those remaining dissidents committed to an armed struggle, he predicts. “As soon as those customs officers arrive, they’re standing there isolated. They’ve got nobody to protect them,” he says grimly.

“And that’s when the shooting starts.”

Borders, pillars and posts

With May’s mind apparently made up, Dublin’s best hope of limiting the damage is to persuade the EU27 to go easy on Britain. Keeping the U.K. effectively within the customs union would appear to be the government’s ideal scenario, with government officials calling for the “closest possible trading relationship.” Failing that, a special arrangement that would allow a soft border in Northern Ireland will be sought. On the question of the €60 billion divorce bill, Ireland is likely to be among the voices seeking to soften the blow.

“It’s going to be difficult because there’s that question of, when a member state leaves the club, it shouldn’t be better off than if it stayed in,” said one senior government official, speaking on condition of anonymity. “But on the other hand, we don’t believe in the punishment concept either.”

Another official pointed to the desire of a number of European business sectors — notably in Germany — to maintain open trade ties with the U.K.. Dublin will seek to build a “coalition” of countries aiming for a the closest possible trading links with Britain, one official said.

The role of the EU in helping foster the 1998 Good Friday Agreement peace deal in Northern Ireland will be emphasized, as will the damage that could be done to the EU’s reputation if it were seen to be stoking tensions in a former conflict zone, all for the sake of customs rules.

“We are entering these negotiations with a copy of the historic Good Friday Belfast Agreement firmly to the fore,” said Flanagan, the foreign minister, on Friday. “Borders, pillars and posts” would “categorically be detrimental to the gains of the peace process,” he added. Ireland won’t be a “proxy” for the U.K. when the EU27 begins to determine its Brexit negotiation position later this year, he insists.

For those still hoping for a soft Brexit, Ireland could be an influential champion.

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