Ireland and Brexit: Time to NIxit? – Part 2: The Economy, Stupid

Jan 9, 2021

In Part 1 – A Question of Identity, I examined the question of whether Brexit will hasten the reunification of Ireland from the point of view of how it has affected the identity of Northern Ireland unionism. In this part, I look at that question from the perspective of the economic consequences of Brexit.

Brexit came about with the effective excision of NI from the United Kingdom by imposing a customs and regulatory border between NI and the rest of the UK. That excision strikes at the heart of the identity of NI unionists, who consider themselves to be at one with their fellow citizens living in Great Britain. But the economic consequences of Brexit on the UK and Ireland are likely to be more persuasive.

The de facto customs and regulatory border is the result of the Northern Ireland Protocol (NIP), which is part of the Withdrawal Agreement signed in October 2019. The NIP came into effect at 11 pm GMT on 31 December 2020 along with the EU-UK Trade and Cooperation Agreement (TCA), which, among other things, governs the post-Brexit trading relationship between the UK and the European Union.

The purpose of the NIP is to ensure the absence of a hard border between NI and the Republic. Under the NIP there will be customs checks for goods entering NI from GB, and NI will be required to comply with certain EU rules, including EU VAT rules, that apply to goods traded in the EU’s single market.

Although the Democratic Unionist Party (DUP) is pro-Brexit, its members at Westminster and in the Northern Ireland Assembly voted against the British government’s proposals for implementing Brexit. In Part 1 I quoted from the speech by Sammy Wilson, the DUP’s Brexit spokesman, during the debate on the proposed legislation to implement the TCA.

While lamenting NI’s excision, Wilson rebutted the contention of Irish nationalists that Brexit would ‘drive a wedge into the Union’. It was telling that he did so by reference to an argument on economics rather than the British identity of his constituents:

‘When it comes to a choice between joining the Irish Republic—a small nation which will bob about in the future storms of economic chaos—and being anchored to the fifth-largest economy in the world, which will prosper under Brexit, I believe that that choice will be an easy one for the people of Northern Ireland.’

To be fair, it is not easy to argue that the UK is a union of one British people under the Crown when the sovereign’s ministers have just excluded you from the kingdom’s post-EU future. As one commentator put it, NI has become ‘the constitutional equivalent of a granny flat’.

But Wilson has a point. The question of whether Brexit will hasten the reunification of Ireland depends largely on the economic consequences of leaving the EU. If it does not work out well for the UK relative to Ireland, bobbing about on the surface might be preferable to going down with the anchor.

But far from bobbing about, some commentators are predicting that Brexit will be the making of Ireland and that its influence in Europe will increase. As the only native English-speaking nation in the EU, it will no longer play second fiddle to the UK at Brussels. Rather it will be the point of contact between the EU and the anglophone world, which, of course, includes the United States.

When the Americans want to negotiate with the EU, it will be Ireland rather than the UK to whom they will look for assistance. When American companies want to set up branches in the EU, Ireland rather than the UK will be the preferred location.

An alternative scenario, however, is that the withdrawal of the UK will see the anglophone influence in the EU diminish so that Ireland’s representatives in Brussels had better learn to speak French or German if they want to be heard. Despite a century of independence, Ireland is still closer to Britain in terms of culture and business and in forms of political, administrative and legal institutions than it is to its continental partners.

Nevertheless, during the Brexit negotiations, the Irish government demonstrated deft diplomatic skill in its dealings with Brussels, ensuring that its ‘no hard border’ priority was an EU red line that was never crossed. While the UK government in its quest for sovereignty was prepared to throw NI overboard, the EU, at Dublin’s insistence, stuck by Ireland, north and south.

This year marks the centenary of the establishment of NI, the partition of Ireland having taken effect on 3 May 1921. While unionists are expected to celebrate the event under the slogan ‘Our Story in the Making: NI Beyond 100’, nationalist parties and institutions have shown a reluctance to be involved in official events. To many of them, there is nothing to celebrate in the painful experience of a century of partition. Their hope is that it will not last much beyond 100. Another event three days later might provide a clue as to how long it will last.

Elections for the Scottish parliament are scheduled to be held on 6 May 2021. A significant victory for the Scottish National Party (which recent polls suggests will happen – but who trusts polls these days?) will place pressure on Johnson to agree to a second independence referendum. As elections for the Northern Ireland Assembly are not due until a year later, the Scottish result will be eagerly watched in Ireland – inflating or deflating nationalist hopes depending on the result.

Despite the optimism, opinion polls in NI do not yet show a clear and consistent majority in favour of reunification and neither the UK nor the Irish government is keen to see a referendum held any time soon. Taoiseach Micheál Martin has said he does not want to consider a border poll for at least five years. And even Sinn Féin’s leader in the Irish parliament, Mary Lou McDonald, is not sanguine about an early poll: ‘We’ll do [a united Ireland] in the next decade,’ she is reported to have said.

As I mentioned in a previous article (Ireland and Brexit: the Good News), NIxit will come at a high financial price for the Republic. Yet, if the result of a border poll favours reunification, Dublin will willingly pay that price.

Brexit definitely has the potential to hasten reunification, particularly as it came about in disregard of the concerns of NI unionists, who are right to question London’s commitment to the union as they wish it to be. Nevertheless, in the end, it will largely come down to how Brexit pans out over the next few years.

If, as many predict, a post-Brexit UK diminishes economically and Ireland advances, unionists will recognise where their future best lies, especially if the form of reunification accommodates their sensibilities. But if Brexit actually delivers ‘the sunlit uplands’ promised by Brexiteers and Ireland ends up bobbing about in storms of economic chaos, partition might well continue for some time beyond 100.

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