June 16, 2017 / 12:57 PM / 2 months ago

Breakdown: Britain’s precarious pre-Brexit pact

German Chancellor Angela Merkel attends a meeting with the heads of government of the federal states at the chancellery in Berlin, Germany, June 16, 2016.Hannibal Hanschke

LONDON (Reuters Breakingviews) - Theresa May will find dealing with Belfast no less complicated than dealing with Brussels. The UK prime minister is in talks to form a government with Northern Ireland’s main pro-British political party. Brexit was always likely to put immense pressure on Northern Ireland, and a pact between the Conservatives and the Democratic Unionist Party could make things even more tense.

Why is Northern Ireland so important?

Talks on Britain’s exit from the European Union are due to begin next week. All sides have agreed that Northern Ireland is one of the red-line issues that must be addressed before the substance of Brexit can be discussed – along with the size of the so-called Brexit bill, the rights of EU citizens living in Britain and vice versa.

Northern Ireland is no simple matter, though. It has the UK’s only land border with another EU member state, the Republic of Ireland, so the impact of any post-Brexit restriction in trade or movement of people will be significant. Residents on both sides of the Irish-UK border remember decades of violence between pro-UK unionists and Irish republicans that came to an end with the Good Friday agreement of 1998.

The physical divide between the north and the south of Ireland is largely invisible today, yet it remains the most politically sensitive border in Europe. The main objective is thus to avoid a “hard” Irish divide at all costs.

What happens when the region leaves the EU?

Northern Ireland faces big Brexit risks. Take funding from Brussels. For every 10 pounds earned by Northern Ireland’s farmers, the Common Agricultural Policy accounts for 8.70 pounds. The EU has financially underwritten the north’s peace process for decades.

Northern Ireland sends a fifth of all its exports south of the border to the Republic of Ireland, so tariffs and the introduction of new red tape would hurt. All-island supply chains and production processes are enmeshed. And curbs on free movement of people would add disruption for the 30,000 people that cross the border daily for work.

How might the DUP play its hand?

The Democratic Unionist Party is in favour of Brexit and union between Northern Ireland and Great Britain, but it doesn’t want a hard border. Now it has leverage over a Conservative party that has at times treated it cavalierly. In addition to maintaining the roughly 9 billion pound annual fiscal transfer from Westminster that props up the region’s sickly economy, the DUP is likely to ask for additional monies for infrastructure and health spending, devolved powers to lower Northern Ireland's corporate tax rate, and a generous package for farmers.

That is the easy part. While the DUP wants the post-Brexit border to remain as open as possible, its priority is to veto any assignation of special status to Northern Ireland in the Brexit negotiations. Meanwhile, the DUP’s nationalist opposite, Sinn Fein, is using Brexit as a way of pushing for a united Ireland.

What’s so bad about special treatment?

Were Northern Ireland to be subject to different rules from Britain, the DUP thinking goes, it would undermine the idea of United Kingdom unity. That takes one potential remedy for Northern Ireland’s Brexit problems squarely off the table: membership of the European Economic Area. Being part of that grouping, which includes non-EU members like Iceland and Liechtenstein, might allow trade and people to flow freely between the north and south. Still, without access to the EU customs union or structural funds, it is no perfect solution.

Another good option for Northern Ireland would be for the UK to remain in the customs union and there has been speculation that the DUP could press May for a softer Brexit. A more cynical view is that the unionists could live with a hard border provided they get what they want in other areas.

The trouble is, currently Brexit negotiations can’t begin in earnest until progress is made on Northern Ireland. And any progress that requires clarification of Britain’s relationship with Europe is therefore, by definition, impossible.

Can this have a happy ending?

May faces at least four competing interests in trying to cobble together a solution for Northern Ireland: Europe, the Republic of Ireland, and Northern Ireland’s unionists and nationalists. The region’s nationalist and unionist communities have diametrically opposed views on Brexit. Bringing the DUP into the heart of 10 Downing Street has already aggravated nationalist parties. But it’s not a given that Ireland and its European partners will agree either.

However, it can only be a good thing for the Northern Ireland question to finally be getting airtime in London's corridors of power. Clear-eyed reflection on the practical implications of a hard Brexit is now that bit more difficult to avoid. And the folly of May’s desire for both a hard Brexit and open border won’t stand up to close scrutiny.

There are no easy solutions for Northern Ireland. At worst, that might leave Brexit talks in a quagmire. Still, forcing some serious debate about the challenges ahead may turn out to be the best outcome of the whole complex affair.

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