Saturday , May 25 2024

How to Leave the EU

Leaving the EU is as complicated as the UK wishes to make it.

The simplest plan for Brexit would be to extend the existing customs rules for the world in general to the EU, with special provision for Ireland.

There is a great deal of confusion sown by the Remain campaign about the tariffs that would be payable to the EU and paid by the EU but the facts are simple, most UK exports to the EU attract very low tariffs (c.4%), even cars only attract 10% although many EU exports to the UK attract higher tariffs because they involve foodstuffs. The  EU will be paying £12.9bn pa in tariffs against the UK’s £5.2bn.  The UK has a Balance of Payments Crisis with the EU and in these circumstances the WTO accepts that subsidies may be paid to UK food producers and car exporters.  The WTO option is viable, simple and involves little more than raising the investment in UK Customs Services by 40%.




Bulk of UK exports lie in the red boxes. Source:  WTO

The WTO option is discussed in depth in The WTO Option after Brexit and The EU Single Market – Good or Bad for the UK?. Click on the links to read the articles.

The advantage of this WTO option for Brexit is that it relieves the EU of almost any role in leaving and the UK Government can decide what it will pay the EU, if anything.

The position of Northern Ireland is particularly problematical in almost all versions of Brexit.   The constraints on solving this problem are how to have Brexit for the UK and keep the relations between the North and South of the island of Ireland almost the same as at present.

According to Sinn Fein this would entail Northern Ireland having a special status within the UK and the EU as a new sort of Associate member of the EU for the purpose of trade and travel. The DUP also want special status, with a free travel area and no overt border controls but recoil from the title “Associate member of the EU”  or “region with special status” because it is a psychological step towards Irish Nationalism.

The Northern Ireland problem on Brexit can be solved.  There are two ways in which tariffs might be charged.  Tariffs could be chargeable on all goods imported into Northern Ireland except those from the rest of the UK or there might be an EU-NI free trade zone.  The DUP is probably only amenable to the first option.  The central problem is that of fraud because any tariffs and customs procedures would need to operate on the principle of businesses declaring their transactions so that border controls are avoided. Whichever solution is chosen it is not mission critical, only food and car exports and imports are significant at present because tariffs are very low on other items. This means that Customs procedures can focus on these in the first instance.

Given that Northern Ireland only exports about £10.7 billion to the rest of the UK there is considerable scope for flexibility. Even in the worst case fraud in Northern Ireland is unlikely to damage the UK economy but systems will be needed to prevent as much fraud as possible. The way forward is to have declarations of purchases from the EU by NI businesses and random inspections by Customs, both of business declarations and of Northern Ireland produce being shipped to the UK to ensure that there is no re-badging of Eire/EU produce.  The business declarations might have a £500 lower limit to avoid excessive bureaucracy. Eire might institute a similar regime for inspection of NI goods entering Eire. Occasional investigations of the extent of fraud would also be needed.

The solution outlined above is obviously going to cause enforcement problems but these can be largely overcome and losses will be small. The imperative would be to stop any large scale fraudulent importing of goods into the UK in general and this should be possible because all such movements would occur through ports and airports which already have a Customs presence.  Don’t let Civil Servants derail Brexit just because any solution will not be perfect.

The Remain media have been exaggerating the difficulty of leaving the EU but it is actually very simple: the UK leaves and deals with any problems like Northern Ireland on an ad hoc basis.  After leaving the various separation payments can be discussed.  Make no mistake, transition periods and separation payments are all part of a Remain strategy to derail Brexit.

This post was originally published by the author on his personal blog:

About John Sydenham

Dr John Sydenham has worked in International Pharmaceuticals and for one of the "big four" International Consultancies. He ran a successful company for 15 years and after selling the company devotes his time to travel, science, black labradors and freedom.

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