Newton Emerson: North cannot become a stable Brexit bridge

It is laughable to suggest Northern Ireland can function like Hong Kong after UK’s exit

‘Northern Ireland could not mirror Hong Kong and become a link between the EU and the UK.’ Photograph: Getty Images

‘Northern Ireland could not mirror Hong Kong and become a link between the EU and the UK.’ Photograph: Getty Images

 

One of the great British delusions is that the UK is a bridge between Europe and America. This belief seems so culturally self-evident it is barely questioned. Only when the claims get out of hand does a Washington official gently point out that such a bridge is redundant – there are telephones, ports and airports in Germany too.

In Northern Ireland, some business and political figures have expressed the hope of becoming a post-Brexit bridge between the UK and the EU.

An outline of this structure has been glimpsed in the proposal, currently being examined by EU officials, for Northern Ireland to become an autonomous customs territory modelled on Hong Kong and Macau.

Pascal Lamy, a former director general of the World Trade Organisation, made the same suggestion two weeks ago, also citing China’s special autonomous regions.

The British government and the DUP have rejected this out of hand as a de-facto dismemberment of the UK, although it is merely the logical conclusion of all arguments for regulatory convergence – the idea that Northern Ireland will continue shadowing EU regulations in key sectors, particularly agrifood, to facilitate a soft Border.

Customs paperwork

When EU powers return from Brussels to London, regulatory competence for devolved matters should pass automatically to Edinburgh, Cardiff and Belfast. London plans to interrupt this by first working out so-called framework agreements, to ensure different regulations within the UK do not end up requiring customs paperwork between England, Scotland and Wales.

However, mention of Northern Ireland tends to be lacking in these assurances and it is understood Stormont could have more flexible frameworks for the 141 policy areas affected.

The technicalities may be dry but citing Hong Kong and Macau grabs the imagination.

Is there some way Northern Ireland could become a link between the EU and the UK, as Hong Kong in particular has been between China and the rest of the world?

The short answer is no, but the reasons are worth exploring.

Hong Kong’s status as a bridge has always been overstated – China was essentially a closed country for the first 30 years after the second World War, forcing Hong Kong to develop as a manufacturing powerhouse in its own right.

That phase of Northern Ireland’s history is behind it.

When China began opening up from the early 1980s, Hong Kong did function as a bridge but only because Beijing chose it for this purpose, establishing a special economic zone on its side of the border and expanding a small fishing village into an industrial city of 10 million people.

Does even Leo Varadkar have such ambitions for Dundalk?

Global ambitions

Hong Kong soon saw its new bridging role as natural, exclusive and permanent. However, as China kept opening up, foreign trade and investment began to bypass it and the city’s global ambitions were sidelined.

Hong Kong’s critical advantage today is as a place where laws are obeyed and contracts honoured, providing a safe place for foreign businesses to dip their toes in Chinese waters.

Most territories that promote themselves as a bridge or a gateway offer this promise of a crossing from risk to reliability.

Perhaps the Free Presbyterians will let us copy Macau instead, and make a living from casinos

It is laughable to imagine Northern Ireland fulfilling a similar function. Even if we could clean up our own murky waters, and not be seen as a chasm of dysfunction and smuggling, which end of our bridge – the EU or the UK – would we portray as comparatively dodgy?

Northern Ireland’s indigenous firms might still want a bridge for their own sake, although in terms of trading with Britain and Europe this would merely take them back to just short of where they are now.

Some businesses might gain an advantage over rivals in Britain and the Republic but this only seems likely in agrifood, which tends to create poorly paid jobs. Most manufacturing and exporting industries across the UK will want to shadow EU regulations voluntarily. Being forced to do so by Stormont would confer no great advantage – certainly not enough to make firms relocate from Britain.

Regulation still offers some prospects. Amid convergence, Northern Ireland could offer just enough divergence to create opportunities – some might say loopholes – to exploit.

This would require an entrepreneurial culture that also seems to belong in our past. We could try to import it, luring in businesses from elsewhere. Finance is by far the most nimble industry at exploiting regulatory differences but financial regulation is not devolved, nor is it likely to be. London will want to keep that plum for itself.

Other industries could lobby for regulatory opportunities. However, that would require a functioning devolved government – presumably comprising the DUP, which does not want any differences between Northern Ireland and Britain; plus Sinn Féin, which is ambivalent at best about making Northern Ireland, let alone Brexit, work.

Sadly, the Northern Ireland bridge does not look like it would carry much weight. Perhaps the Free Presbyterians will let us copy Macau instead, and make a living from casinos.

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