Could turning a blind eye solve the Irish question?

With the Brexit bill agreed, the biggest barrier to trade talks is the desire to avoid a hard border in Ireland. Turning a blind eye to difficult issues might be an option, says Simon Wilson.

What is the core issue?

Brexit means that the border between Northern Ireland and the Republic 310-miles long with 300 crossing points will become the frontier at which the EU's freedom of movement in people, goods, services and capital legally ends. The UK's commitment to leaving the customs union implies a land border, involving physical customs checks. Yet all sides agree they don't want a "hard" border, with checkpoints and queues.

The UK wants to see the continuation of an "invisible" border, as Brexit secretary David Davis put it. Dublin, too, is keen to avoid a hard border, and the EU's Brexit negotiating principles demand that one be avoided. The question of how to square that circle has taken on renewed urgency in recent weeks.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Why's that?

At the key European Council summit in mid-December, the UK wants the EU to agree to move on to the second phase of talks trade. The Irish PM Leo Varadkar, backed by the EU, has used his moment of maximum leverage to make clear he will not agree that "sufficient progress" has been made unless Britain offers credible "tailor-made solutions" for avoiding a hard border.

The UK says it can't do that until it knows what the trading relationship will look like it hopes to cut a free-trade deal that will make the border issue much easier to solve. Complicating things further, the UK is still considering the level of regulatory alignment with the EU it wants to pursue (the signs being that it is moving towards less alignment rather than more, allowing it to go its own way on things such as emerging technologies).

Why avoid a hard border?

Economics, politics and security. Brexit is bad news for Ireland already: it throws up new barriers to trade with the UK, its main trading partner and complicates its physical route-to-market to mainland Europe. Then there's the peace process. During the Troubles, the border had army checkpoints and watchtowers, as well as (until 1993) customs controls: no one wants to see any of that reinstalled, and few think a return to violence is likely.

Even so, the constitutional and practical arrangements that govern Northern Ireland today depend on a kind of constructive ambiguity that has facilitated both peace and cross-border trade. Jonathan Powell, the British official most closely involved in negotiating the Good Friday Agreement, believes the breakthrough was possible because it used both countries' EU membership to "park" the issue of Irish or British identity. In short, joint EU membership took the border out of Irish politics; Brexit risks putting it back.

So how could this be resolved?

First option: the UK could stay in the customs union this looks all but impossible barring political change in the UK. Second: Northern Ireland could stay in the customs union, in effect shifting the customs border to the Irish Sea. That would create a new economic border between Northern Ireland and Great Britain and so is politically unlikely, particularly as Northern Ireland does four times as much trade with Great Britain as it does with the Republic. Options three (the Republic leaves the EU) and four (a unified Ireland inside the EU) are also not realistic though the latter is no doubt more likely than it was.

So what options are left?

The UK hopes to sign future free-trade deals with countries globally. So the EU can't agree to a more-or-less open border, or it runs the risk of US beef, Chinese steel, and so on, being imported tariff-free via Belfast, across the border to Dundalk and on to France, Germany and the rest. So what's left is some kind of post-Brexit customs deal between the UK and EU as part of the "bespoke" package hoped for by Theresa May.

Turkey has such a customs union with the EU, but it only covers goods, and requires Turkey to align its trade policy with the EU's. This would not work for the UK, which wants to be free to sign trade deals. But it is at least an example of a bespoke EU agreement with a neighbouring nation.

What might the border look like?

Officials are studying existing areas of all-island co-operation, such as electricity, as possible models. They are also looking at the status of territories such as Hong Kong and Macau, which have independent trade policies from China. Existing EU frontiers such as the border between Sweden and Norway avoid long queues, thanks to a mix of smart technology, pre-clearance, electronics and checkpoints some way back from the border.

Ultimately, with all parties keen to avoid a hard border, it seems likely a solution can be found. Bertie Ahern, former Irish PM, reckons the obvious answer is the same kind of pragmatism and constructive ambiguity upon which the Good Friday Agreement is built. That would mean "to make technology work in most cases and to turn a blind eye to those areas that can't come in within technology". Whether the EU could agree to that is another matter.