The UK and Ireland have had a special relationship since the establishment of the Irish Free State in 1922. Both countries joined the then European Economic Community on the same day and their current economic and political relationship largely depends on their membership of the EU.
Finding a way to manage the impact of Brexit on Ireland is a key issue in the first phase of the UK’s exit negotiations. The important questions at this stage are:
- the Northern Ireland peace process, underpinned by the Good Friday Agreement (or Belfast Agreement)
- how to operate the border between Northern Ireland and the Republic of Ireland for people and goods
- preserving co-operation between the North and the Republic, and between the Republic and the UK.
Given the large degree of economic integration between Northern Ireland, Ireland and the UK, the future UK-EU trading relationship will also be of fundamental importance to the economies of both parts of the island.
The Good Friday Agreement, signed in 1998, brought an end to sectarian conflict and established power-sharing in Northern Ireland. The agreement assumes EU membership for both the UK and Ireland, for example, by making provisions for the UK and Irish governments to co-operate on EU matters.
The Good Friday Agreement allows people born in Northern Ireland to choose either Irish or British citizenship, or both. The UK has clarified that it wants this option to continue after Brexit.
The agreement also established special EU funding programmes, known as PEACE, to reinforce the peace process and support cross-community projects. It also created the North South Ministerial Council (NSMC), which allows the Dublin and Belfast governments to co-operate in various areas including agriculture, education and transport.
UK, Irish and European officials are now assessing the impact of Brexit on 142 separate areas of cross-border co-operation, which are underpinned by the Agreement.
What have the various parties to the negotiations said about the peace process?
The UK and Irish governments, the Northern Ireland parties and the European Commission have all agreed that the withdrawal process should not be allowed to undermine the Good Friday Agreement.
Shortly after the EU referendum, the then First Minister and Deputy First Minister of Northern Ireland, Arlene Foster and Martin McGuinness, wrote to Theresa May noting the importance of protecting the peace process and the political settlement in Northern Ireland. They also called for certainty over the future of PEACE funding.
The UK Government has proposed that the current PEACE funding, which runs until 2020, should continue and that the UK, Ireland, the Northern Ireland Executive and European Commission should discuss options for further funding beyond that point.
How will Brexit affect people crossing the border between Northern Ireland and the Republic of Ireland?
Once the UK leaves the EU, its only land border with the bloc will be the 310-mile line between Northern Ireland and the Republic of Ireland. Decisions need to be made on how to manage the movement of people and goods across that border.
The UK, Ireland and EU have all committed to maintaining the Common Travel Area (CTA), which has been in place for most of the period since 1922. The CTA allows free movement of British and Irish citizens between the UK, Ireland, the Channel Islands and the Isle of Man and provides access to various government services in each country.
Ireland will continue to allow freedom of movement for citizens of the other 26 EU member states. The UK envisages using inland controls, such as ‘controlling access to the labour market and social security’, to enforce immigration policy without requiring checks on people crossing the Irish border.
How will Brexit affect goods crossing the border between Northern Ireland and the Republic of Ireland?
The UK, Ireland, Northern Ireland and the European Commission have all signed up to the principle of no ‘hard border’ between Northern Ireland and the Republic for goods as well as people. However, the UK’s current policy is that it is leaving the EU Single Market and Customs Union. This means the border between the North and the Republic will become the EU’s external border where customs and regulatory checks would normally take place.
Managing this poses real issues because of the highly integrated cross-border economy – farms, villages and daily commutes all straddle the border. There is also a risk that any ‘physical infrastructure’ could become a target for terrorists.
What have the UK and Irish governments and the EU said on Northern Ireland?
In August, the UK Government published a position paper on Northern Ireland.
In September, the European Commission published its principles for the dialogue on Ireland and Northern Ireland. The European Commission is clear that it is for the UK to propose solutions to these issues. The UK Government argues that the border question will only be fully settled in the future trading negotiations.
Irish Taoiseach (Prime Minister) Leo Varadkar has demanded written assurance that there will be no hard border between the Republic and the North as part of the conclusions of the first phase of Brexit negotiations. Dublin has asked for five commitments from the UK before allowing discussions to move on to the next phase. These include the Taoiseach’s call for Northern Ireland to “continue to apply the rules of the Customs Union and Single Market” once the UK mainland leaves both, to remove the need for a hard border between the Republic and the North.
This would imply some form of border between the islands of Ireland and the UK.
UK government ministers have ruled out this possibility and have made clear that they will not accept any form of border between Northern Ireland and the rest of the UK. Instead, they propose a series of specific arrangements for the Northern Ireland-Republic of Ireland border that will enable “as frictionless and seamless a border as possible”. These include waivers for small and medium enterprises (SMEs) and a ‘trusted trader’ scheme for businesses operating across the border.
In early December, David Davis, the Secretary of State for Exiting the EU, confirmed that there are areas in which the UK will seek “to maintain safety, food standards, animal welfare and employment rights” that align with EU regulations but are not identical. The Government intends to use this form of alignment to avoid a hard border but is yet to secure agreement from the Democratic Unionist Party (DUP), which is supporting the minority Conservative Government in the House of Commons, that it will agree to alignment in Northern Ireland.
The DUP has been clear that it does not want any special status for Northern Ireland that separates it from the rest of the UK. On 4 December, Arlene Foster, the DUP leader, set out that her party “will not accept any form of regulatory divergence which separates Northern Ireland economically or politically from the rest of the United Kingdom”. But it also does not want to see any changes to the current border arrangements between the North and the Republic.
Due to the breakdown of power-sharing in January, there is no Northern Ireland executive at the moment, meaning it has not had a unified voice in Brexit discussions.
Sinn Féin does not want any form of border between the North and the Republic and has proposed that Northern Ireland be given ‘special status’ within the EU, thereby allowing “the whole island of Ireland to remain within the EU together”.
Will the Irish border impasse prevent sufficient progress by December?
The Irish border issue has now emerged as a big stumbling block on the route to phase two of the Brexit talks. There is no obvious way of squaring the circle between the UK’s ambitions to leave the Single Market and the Customs Union while averting any special status for Northern Ireland, avoiding checks at the border – and all the while protecting the integrity of the Single Market.
The Irish have threatened to hold up agreement at the European Council on 14-15 December. They have backing from the rest of the EU27 and European Parliament who agree this issue needs to be addressed in phase one of negotiations. However, the UK has argued that, because the issue is about the future trading relationship, it can only be resolved in the next phase of negotiations.
The agreement on the UK’s exit from the EU has to be agreed by a qualified majority of the remaining EU27, meaning that 72% of member states (not including the UK) must agree. It then must be approved by the European Parliament. No one member state has a veto.
However, the agreement on the future relationship between the UK and the EU is likely to be classified as a ‘mixed competence’ agreement. It will need to be approved by each of the member states individually, including by their national and in some cases regional parliaments. This means that Ireland will have a veto on that deal.
Are there any other difficult areas for Ireland and Brexit?
Ireland and Northern Ireland also share a single electricity market and electrical infrastructure. Maintaining this arrangement will require Northern Ireland to continue to comply with EU regulations - while having no say over their development. If it is not maintained, the progress of the single electricity market could be reversed, undoing benefits brought about by increased energy efficiency and competition.
What are the potential impacts of Brexit on the Irish economy?
One of the problems for the Irish Government is that its economy is highly integrated with the UK’s. Currently, around 80% of the goods Ireland exports are transported to or through the UK. Ireland also sources 41% of its food imports and 55% of its fuel imports from the UK mainland.
An assessment from the Irish Ministry of Finance in October 2016 noted that Brexit “is expected to have a material negative impact on the Irish economy”. A separate Irish government report called for “the closest possible trading relationship between the EU and the UK”.