CROSS-BORDER TRADE on the ISLAND of IRELAND in the WAKE of BREXIT Logan Herr
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View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Lehigh University: Lehigh Preserve Lehigh University Lehigh Preserve Volume 36 - The nitU ed Kingdom On The rB ink Of Perspectives on Business and Economics Brexit (2018) 2018 Cross-Border Trade On The slI and Of Ireland In The akW e Of Brexit Logan Herr Lehigh University Follow this and additional works at: https://preserve.lehigh.edu/perspectives-v36 Recommended Citation Herr, Logan, "Cross-Border Trade On The slI and Of Ireland In The akW e Of Brexit" (2018). Volume 36 - The United Kingdom On The Brink Of Brexit (2018). 5. https://preserve.lehigh.edu/perspectives-v36/5 This Article is brought to you for free and open access by the Perspectives on Business and Economics at Lehigh Preserve. It has been accepted for inclusion in Volume 36 - The nitU ed Kingdom On The rB ink Of Brexit (2018) by an authorized administrator of Lehigh Preserve. For more information, please contact [email protected]. Perspectives on Business and Economics, Vol. 36, 2018 CROSS-BORDER TRADE ON THE ISLAND OF IRELAND IN THE WAKE OF BREXIT Logan Herr Cross-border trade is the cornerstone of the Northern Ireland and Republic of Ireland economic relationship and a primary driver of Brexit discussions, which threaten the integrated and currently invisible seams of the border. The UK has simultaneously committed to maintaining frictionless trade and to no hard border post-Brexit. This article analyzes the UK’s proposed solutions for the Irish border as well as the potential impact of these new systems on the economics of cross-border trade on the island of Ireland. Introduction units in the north. Each month, roughly 385,000 trucks and vans and 1,850,000 cars Uncertainty presides over the future of cross that border. Additionally, around 35,000 cross-border trade on the island of Ireland in people cross daily because they live and work the wake of the quickly approaching March on opposite sides. One particular east-west 2019 Brexit date. At the time of writing this road between the towns of Clones and Cavan article, the UK is committed to leaving the traverses the border four times within six customs union and single market of the EU, miles. Unravelling ties as tightly intertwined as thereby forcibly erecting a customs border these amplifies the challenges Brexit presents that will need to be managed in the future. for the border (McCann and McSorley). A focused examination of the UK’s proposed In this article I first lay out the history of resolutions for the Irish border post-Brexit the border and then explore the border’s role provides clarity into the future of cross-border at the center of Brexit negotiations and the trade and its economic impacts. British position on the border’s future status. Spanning the province of Ulster, the I then focus on economic aspects, complete border between Northern Ireland (NI) and with a snapshot of current trade between NI the Republic of Ireland (ROI) divides rivers, and the ROI. Finally, I critically analyze, derive bridges, towns, and even the occasional the economic impacts of, and develop points farmhouse. Despite a troublesome and violent for consideration on the proposed solutions history, the 310-mile frontier today is nearly from the UK government for the Irish border invisible. One of the only detectable differences post-Brexit. Shifting away from a frictionless during a crossing is the change in speed limit free trade border will have heavy consequences signs from metric units in the south to imperial at the local island level on the two integrated 76 economies. Through highlighting the key role in a disruptive trade war (Hayward). pitfalls of the UK’s imaginative plans, it is evident that nothing can compare to openness Anglo-Irish Trade War and cooperation in driving seamless trade relations. In the early years after partition, the Irish Free State and the UK (including NI) History of the Irish Border were closely tied through trade. The Irish Free State was greatly dependent on UK coal Partition coming across the Irish Sea while nearly 90% of all agricultural products, the largest As a result of the Irish War of sector of the Irish economy, was exported to Independence, the Anglo-Irish Treaty was the UK. After a series of financial disputes in signed in 1921. It established the Irish Free 1932, the UK instituted a hefty 20% import State while partitioning 6 of the 9 counties duty on all goods coming from Ireland as of Ulster in the majority Protestant and well as quotas on Irish livestock. Retaliating, pro-British northern region of the island. the Irish Free State imposed import duties This northern territory, just one-sixth of on coal, steel, iron, cement, electrical goods, the landmass of the island, became NI and machinery, and other top British exports (“The remained a member of the UK. The partitioning Economic War…”). This period offers insight kept majority Protestant unionist counties into an uncertain future where import duties within NI, while majority Catholic nationalist and trade boundaries may be established once counties became part of the Irish Free State again. (later becoming the Republic of Ireland in After 6 years of this economic tug of 1949). Despite establishing independence, Dr. war, known as the Anglo-Irish Trade War, Katy Hayward, a sociology researcher from severe impacts rippled across these nations, Queen’s University Belfast who specializes in underpinned at the same time by the global studying international borders, describes how economic depression. The biggest scars were the new Irish border was drawn with British left on the island of Ireland. The economy of contempt: the Irish Free State nearly collapsed with its The colonial high-handedness with economic lifeblood, the cattle industry, down which the border was carved is reflected 35% in exports and many farmers going in its route, which cuts through bankrupt. Unemployment rose over 475% single farm holdings and shows little from 1931 to 1935 while, simultaneously, Irish respect for the natural terrain of the emigration increased to more economically landscape. For the largely rural and sustainable shores, including Australia, impoverished borderlands, there were Canada, the United States, and England. particularly dire consequences from The overall cost to the Irish Free State from severing the close social, economic the trade war was about £48,000,000, an and kinship ties that ran across what amount worth roughly £3 billion today (“The had previously been merely a county Economic War…”). NI, a region dependent boundary. on cross-border trade, struggled to find new The Common Travel Area was created in markets, and many industries were hit hard 1923, shortly after partition, to allow citizens by the duties imposed at the border. Mainland of the Irish Free State, NI, and mainland Britain suffered least in comparison but still Britain to travel throughout and between lost 22% in its share of the Irish Free State the island nations without identification or market and faced shortages of agriculture documentation. This significantly eased the products traditionally acquired from the Irish burden of separation on people living on either Free State. A treaty ended the trade war in side. In its early stages, the border’s customs 1938, although the adverse effects echoed in checkpoints managed a limited variety of basic the region much longer. One lasting impact, goods, including some manufactured products. smuggling, has become an integral part of A short decade later, the border played a pivotal Irish culture (“The Economic War…”). 77 A Culture of Smuggling businesses began cooperating across the border and trade become more fluid (McCann Smuggling became a day-to-day and McSorley). opportunity not just for organized crime A Guardian journalist, Sean O’Hagan, groups funding violent activities but also for journeyed in Spring 2017 along the Irish families to make ends meet and avoid the border, documenting the sentiment of the effects of duties and fines on small family people living in the borderlands on issues of the budgets. This phenomenon was amplified in border post-Brexit. His discoveries exemplify the borderlands, where even children were sent the threat a hardened border would have on off by their parents to smuggle butter, bacon, the foundations of peace gained through the bread, or eggs across the border (“Living Good Friday Agreement: with...”). Duties on products coming from one If one were to imagine a worst-case side meant cheaper prices on the other, and post-Brexit scenario for Northern smuggling itself became an accepted norm, Ireland, it would involve the border carrying with it an air of rebellious glamor and becoming once again a focus for humanitarian vindication, where the culture paramilitary aggression. Dissident welcomed innovative methods of subverting republican groups remain sporadically the border (O’Leary). active in Northern Ireland. They are Smuggling significantly waned after the relatively few and have little support joint accession of the UK and the ROI to the among the nationalist population of European Economic Community (EEC) in the north of Ireland, but it is worth 1973. This established access into the EEC remembering that the Provisional customs union and standardized policies IRA occupied a similar position on the and tariffs on goods, which greatly reduced margins at the start of the Troubles. trade barriers and furthered the openness of O’Hagan’s travels unearthed a heavy border relations. Looking forward, a post- sentiment against a return to the border posts Brexit withdrawal from the customs union of the past. There is a lot at stake. Thanks and a potential return to a hardened border, to the combined effects of the Good Friday including tariffs and customs checkpoints, Agreement and membership in the EU for could bring criminal and cultural smuggling both the UK and the ROI, cross-border trade is back to the forefront (Hayward).