What is Brexit and what’s going to happen?
In June 2016, the UK voted by referendum to ‘Leave’ the EU. Majorities in Scotland and Northern Ireland voted ‘Remain’, but the total UK ‘Leave’ vote was 52%. Article 50 of the Lisbon Treaty sets out how a Member State leaves.
The European Commission has appointed a task force, led by French politician Michel Barnier, to negotiate on behalf of the EU. The European Council minus the UK (27 Heads of State), agrees the negotiating guidelines for the Commission. Once Article 50 is triggered, the UK and EU have an initial two year period to finalise a withdrawal agreement. This may be extended by one year by agreement of both parties. During this time the UK remains a member of the EU, with all accompanying rights and obligations.
Any final deal needs to be agreed by both the EU and UK. The UK parliament must accept it. The EU requires an ‘enhanced qualified majority’, meaning no single Member State can veto it (needs to be agreed by 20 of 27 Member States, representing 65 percent of the population of the EU). The European Parliament must consent to the deal by simple majority.
What exactly will the UK be leaving?
The EU is governed by the Treaties of the EU and has many sectoral programmes and agreements in areas including environment, energy, transport, agriculture and workers’ rights. The UK will leave the European Parliament, Commission, Council and Court of Justice. However, the UK referendum didn’t mandate sectoral specifics, so much is yet to be decided. Some initial positions are known, including Prime Minister May declaring the UK will leave the Single Market.
But there is much that is unclear. Prime Minister May stated the UK will not remain ‘full members’ of the Customs Union. Similarly, the UK might seek to remain in EFSA (food standards), Horizon 2020 (research), Erasmus (student exchange) , Euratom (nuclear energy), Open Skies (airlines), and so on. The UK and Ireland want to retain the Common Travel Area, which allows free movement of people between the UK and Ireland, and pre-dates both countries joining the EU.
What’s the Single Market?
It allows free movement of goods, people, services and capital across the EU and ensures common standards and regulations. It means citizens can work and businesses can trade across the EU with minimal hassle. The UK leaving the Single Market could create new trade barriers including tariffs and new costs due to different regulations. This would make Irish businesses less competitive in the UK, with sectors including agri-food, retail and manufacturing being particularly exposed.
What’s the Customs Union?
Under the Customs Union the EU sets common external tariffs with other countries (e.g., USA, Canada). If the UK leaves this and sets its own tariffs with these countries, it will be difficult to avoid border controls for goods. This is particularly sensitive for Ireland, as these controls could be applied around the North.
What’s the Common Travel Area?
Ireland and Britain have enjoyed a special relationship for many years and the Common Travel Area (CTA) has been in existence since the 1920s. As a result of the CTA, the Irish and UK Governments have reciprocal visa arrangements including: Passport-free travel for Irish and UK citizens; Measures to increase the security of the UK-Ireland border; Sharing of immigration data.
The Irish and British Governments have both said the continuation of the CTA is a priority, and that call has support from other Member States.
However, Brexit creates a situation in which the border with Northern Ireland becomes an external border of the EU. And Brexit was, in part, about stopping people entering the UK. As a consequence, there is a possibility that a ‘hard’ border, potentially involving passport and custom controls, could emerge, dividing the island of Ireland. This would disrupt cross-border trade, tourism, work and commutes, and act as a lightning rod for paramilitaries. It would also hinder the valuable free movement of people between Ireland and the UK.
What’s at stake politically?
There are multiple political implications of Brexit on Ireland. For example, it could affect progress towards a united Ireland both negatively (e.g., new border controls) and positively (e.g., Northern Ireland citizens want to remain in EU). Similarly, it challenges Ireland’s voice in the EU, as the UK and Ireland have allied on many EU issues, including independence on tax policy.
What’s at stake economically?
Brexit poses some big economic risks to Ireland, as well as more limited opportunities. With the UK being Ireland’s largest trading partner, sectors including agri-food, tourism, retail, textiles and manufacturing are particularly exposed. New barriers on trade, working or travel, coupled with diverging standards and weaker sterling, increase costs and reduce competitiveness for Irish business, putting jobs at risk. The Department of Finance estimates that Brexit could lead to 40,000 job losses and a reduction of 30% in exports to the UK.
Opportunities include some jobs from the UK, particularly in areas like financial services. Ireland and Malta will now be the EU’s only English-speaking member, which could help with foreign direct investment. However, this could be countered by the UK no longer having to adhere to EU rules in areas like taxation and environmental protections.