The EU, understandably, wants to preserve the integrity of its customs and regulatory territory. The UK and Ireland wish to preserve, post Brexit, the integrity of the Good Friday agreement which implies an open border between the Union and a non-Member State. Herein is born the famous “Backstop” conundrum – the solution ‘de jour’ being the UK remaining in a Customs Union with the EU.
Like many Europeans I find the thought of the Union without the UK distressing and a no-deal exit even more so. But one should not therefore obfuscate the terms of the ongoing debate.
A Customs Union, we all know, comes with a price – notably the inability of the UK to conclude independent trade agreements – a price not all Brexiteers are willing to accept, at least not as a permanent arrangement or at least not as something forced upon them deus ex machina. It is also unlikely that the Union would allow the UK to have more than a consultative voice in future EU trade agreements which, of course, would bind such a Customs Union. Another unpalatable dish.
But all this, we are told, will disappear when Final Status negotiations between the EU and the UK will conclude.
The notion that final status talks will bring an end to a Customs Union Backstop obscures one very uncomfortable catch 22 truth. The need for the Backstop will disappear if, and only if, the final status talks result in the UK remaining, one way or another, de jure or de facto, in an EU Customs Union applying the Common External Tariff!
If the final status talks result in anything else, say, a Canada style Free Trade Area in goods and some services, even of a profound and capacious character, goods from third countries would still enter the UK under UK custom clearance rules and paying UK custom duty rates. What is to stop them, then, from entering the EU through Northern Ireland avoiding thus EU customs clearance? Back to square one, back to the Backstop, back to a Customs Union.
(When you hear talk of the need for “Customs Alignment” or the like it is essentially a customs union with a mask.)
Thus, in any such future negotiations, both parties will have to submit to the cold logic of the apparent legal impossibility of ensuring, on the one hand the integrity of the customs territory of the Union whilst, on the other hand, maintaining an open border with a country which is a non Member State and which is outside an EU Customs Union. If you want an open border between the North and the Republic, you must be part of a Customs Union. If you do not wish such, you cannot have an open border.
I say ‘apparent’ legal impossibility – because there is an approach which would obviate this harsh legal logic, an approach which was briefly canvassed at various points in the negotiations but discarded as ‘impractical’. I believe it merits a new examination if the insoluble Backstop conundrum is not to haunt both parties for years to come. What, then, is the Frontstop approach?
If you have ever flown from Ireland or Canada or the Caribbean to the United States you will have experienced a version of the Frontstop approach. You get off the plane in Boston, or Miami or Los Angeles and just walk into the USA: No passport control, no customs control. How so? Simply because these controls were performed by American officials on Irish or Canadian or Caribbean soil. For travelers, similar arrangements operate at either end of the Channel Tunnel between the UK and France (and thence onward to the rest of the Schengen area). You encounter the UK Border Force in Calais, Brussels and Paris and say bonjour to the French Police aux Frontières in Dover and London’s St Pancras Station.
Suspend your disbelief and imagine several EU Frontstop Centres in Great Britain and the North, (so no difference between the two) where all goods destined for Ireland via Northern Ireland would be processed, including payment of duties and the like, before they actually left British territory. (I will deal with cheats in a minute). Once cleared and certified, the need for processing at the frontiers is obviated and the Irish border can remain open as it is today.
Some immediate objections come to mind. The first and most obvious is that, if there is no physical control between Belfast and Dublin, the temptation would be huge to drive a lorry through without having been processed and cleared in a Frontstop Centre or change the cargo cleared to uncleared cargo. A smugglers’ charter!
I have spent a lifetime in the world of transnational economic and trade law and believe I have a sober and realistic view of the power and limitations of the law. Even with hard physical borders, smuggling and cheating takes place; like unemployment, as long as it is limited, we have learnt to live with it. A so called Hard Border is a lot less hard than one might imagine: Just look at the container depots in all major European ports, where just a miniscule fraction of the thousands of containers are actually inspected. Do you really believe no smuggling takes place?
Thus, if knowingly transporting or even possessing goods exported from the UK into Ireland without Frontstop clearance were made a serious criminal offence with correspondingly serious penalties, including jail time (the way we deal with trafficking in stolen goods) ,enforced by spot checks anywhere within the territory of the UK and Ireland – there is no good reason other than convention that the spot checks should take place at the Frontier itself — compliance would be high and, critically, evasion would not be an order of magnitude different from the levels seen under normal border procedures. And even if it is somewhat higher, maybe this is a price worth paying for maintaining the Good Friday Agreement? If one made the transporter as well as the exporter and importer liable, the level of compliance would rise even further. Catching a few cheats through spot checks and publicizing their deserts at the hands of the law would deter all but the hardened smugglers. And as technology develops, enforcement mechanisms would develop correspondingly.
There is, of course, in the world of customs officials a mind-set attached to physical border controls. It is hard to shake habits on which one was brought up. But note, the Frontstop approach does not suggest the elimination of borders – but rejecting the fetish of walls, fences, inspection booths and long queues. The border remains, its physical manifestation and topographical location are simply moved. In the age of digital trade this is hardly a revolution.
A second objection may relate to goods imported from third countries, and then integrated into products produced in the UK. Depending on the value of the imported components in the final product, such goods may, too, be liable to EU customs duties should they move from the North to the Republic even if, under final status there was a Free Trade Area between the UK and the EU. It will be, under the Frontstop approach, the duty of such producers, under a similar legal regime, to ensure that these goods are declared, their ‘origin’ ascertained and any duties owed processed through a Frontstop centre. The goods will not necessarily have to be presented physically at the Frontstop centre. When customs officials apply rules of origin to determine where all or part of a product comes from, they use intelligence, look at certificates, carry out random checks and prosecute criminals. They do not open every container, let alone travel around the world looking at factories to see what they are producing.
This is not the place to address the myriad of details that would need to be worked out. There are not, for example, only customs duties but also regulatory standards to think of. Already now compliance with such takes place away from frontiers. And if a special regulatory carve up for the North, especially as regards livestock were to be established, the Frontstop would would work equally well. The Frontstop approach is not a trade agreement. In professional jargon it is a Trade Facilitation Procedure which is aimed to square the Irish circle. It respects the principle of no physical border between the two parts of the Island, it respects the territorial unity of the United Kingdom and allows the European Union to protect at a level commensurate with traditional frontier controls the integrity of its customs territory.
As mentioned, in the course of negotiations ideas of this nature were canvassed and rejected as ‘impracticable’. If you stick to this assessment, the result is a stark choice: Either Customs Union or Hard Border. And if the UK crashes out of the EU with a No Deal – the Union will face the dilemma immediately: Either it insists on a hard Irish border in order to protect the integrity of its customs territory or? Or what? It cannot force a Customs Union on the UK so the only alternative would be the Frontstop approach, like it or not.
There would not be enough time to institute this approach in the weeks remaining before Brexit, so for a short time there would have to be an extension of current arrangements, either through a prolongation of the Article 50 two year limit or through a transitional Customs Union as proposed right now. But in this case since we are dealing with a procedural trade facilitation device we could expect a legally binding commitment with a fixed time set in advance allocating the time necessary for the institution of the Frontstop procedures and, thus, the end of any form of transitional customs union — without prejudice to the outcome of the negotiations for the long term relations between the EU and the UK which, if both parties agreed, might well opt for a Customs Union.
A legally binding commitment could be taken by the EU’s Heads of State or Government (HOSG). The HOSG can take decisions which do not amend EU treaties or legislation, but set out political commitments and understandings about what rules mean in practice and how they should be interpreted. Critically, HOSG decisions can be understood and relied upon as legally binding international agreements. The most recent relevant example is the February 2016 decision recording the agreement reached with David Cameron’s Government, entitled “A new settlement for the United Kingdom within the European Union”, the result of the “renegotiation” preceding the referendum. The UK even registered that HOSG decision as an international agreement in the UN’s depositary of treaties in New York. It has the advantage of binding the national leaders, not just an EU institution, and of adding a gloss to an agreement (in this case the Withdrawal Agreement) without reopening and amending it.
There will be, no doubt, scores of lawyers whose instinct will be to find a myriad of reasons why the Frontstop approach could not work. It would be far more fruitful, as Altiero Spinelli once advocated, if they were instead to use their legal skills and imagination to find ways which would make it work. It is political wisdom as old as the Union itself: Where there is political will, a legal way can be found. It is simply not credible to imagine that three powerful public authorities, the UK, Ireland and the Union itself could not jointly make this approach, which is in their collective interest, work and thus remove one huge road block for future EU UK relations.