The Brexit Border Blunder
The usual Brexit disclaimer -- the U.K. has no good options, only less-bad ones -- applies with extra force when it comes to the dilemma over the Irish border. Nevertheless, the issue will be easier to address, if not resolve, once the U.K. and European Union start trade negotiations in earnest.
There is currently no physical border between Northern Ireland, which is part of the U.K., and the Irish Republic, which is part of the EU. Some 37 percent of Northern Ireland's exports go to Ireland, while nearly 14 percent of Irish exports go to the U.K. This close economic relationship, and the nearly two-decade-old Good Friday peace agreement, are underpinned by EU membership and common EU regulations. It is in nobody's interest to jeopardize these economic ties.
Yet the EU has refused to open trade talks until Britain resolves the question of where the new EU-U.K. border will be and guarantees that Ireland won't be cut off, either through regulation or physically, from Northern Ireland.
U.K. Prime Minister Theresa May, in turn, is reluctant to agree to an arrangement that keeps Northern Ireland in the EU customs union. This is partly because it is opposed by the Democratic Unionist Party, the small Northern Irish party that is propping up her government, and partly because if she does agree to it, Scotland and even London might demand a similar deal. Many in May's own party are also opposed. Brexit campaigners promised that leaving the EU would allow the U.K. to make better trade agreements with other non-European countries, which the U.K. would not be able to do if it is part of the EU customs union.
May needs to overcome her reluctance. Keeping Northern Ireland in the customs union, at least temporarily, and guaranteeing that the Irish border will remain open should be enough for the EU negotiators to agree to move on to trade talks. That should be the paramount goal.
Time is running out. The longer those talks are delayed, the greater the likelihood that no deal will be reached by the March 2019 deadline, when Britain's EU membership officially comes to an end. Without a deal, there will be plenty of what economists refer to as "trade friction," which ordinary people -- British and European alike -- will experience as higher prices and fewer jobs.
It's also possible that the impasse over the Irish border will get more manageable once the EU and U.K. better understand the shape of their future trading relationship. The more the EU professes to be concerned about the Irish border, the more it should recognize the need to let the wider trade talks get started.
What May can't do is let her fragile hold on power dictate the government's position. It would be naïve to expect her to put aside political considerations. To get Brexit talks to the next stage, however, she needs to put the national interest first.
--Editors: Therese Raphael, Michael Newman.
To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at email@example.com .