In the 1980s, Deng Xiaoping proposed the “one country, two systems” model to persuade Britain and the Hong Kong people to accept the idea of returning to China.
Now, 40 years later, the Irish government is proposing a similar model to help Britain resolve one of the biggest obstacles to its ambition to achieve Brexit and leave the European Union.
This obstacle is the nature of the 500-kilometer border that separates Northern Ireland, a part of Britain, from the independent Republic of Ireland in the south.
In March 2019, along with the rest of Britain, NI will leave the EU, while the Republic of Ireland will remain an enthusiastic member. When this happens, will the border be filled with customs and immigration posts to regulate the flow of goods and people between the two sides?
The Irish government is adamant that such posts not be created and the border remains open. It says that Britain must provide a written guarantee of this before it can start the next stage of talks on post-Brexit trade on Dec. 14.
China and Hong Kong are an example of how to solve this problem, said Irish Foreign Minister Simon Coveney on Nov. 22. “China lives with and functions with Hong Kong which has very much been part of Chinese territories but operating under a different set of rules,” he said. “I am not sure whether the Hong Kong solution is appropriate for Northern Ireland or not, but it is an example of ironically a British-designed solution.”
One solution proposed by Dublin and the EU Commission on Nov. 10 was that, after Brexit, NI would remain within the EU customs union while it continued to be part of the United Kingdom – one country, two systems. Goods would be able to move freely across the border, as they do now.
Currently, 177,000 lorries and 250,000 vans cross the border for trade every month. Northern Ireland relies on the Republic for more than 60 percent of its food and live animal exports.
One-quarter of NI milk, for example, is sold to processors in the Republic; a substantial part of their output comes to Hong Kong and mainland China. More than a third of NI lambs are processed at plants in the Republic. Goods cross the border many times before becoming final products.
All these are strong arguments for the “Hong Kong model”. A customs union would allow Ireland’s economy to continue as a single unit. GDP growth in the Republic this year will be 4.5 percent, the highest in the EU. In 2015 and 2016, GDP grew 26.3 percent and 5.2 percent respectively, also the highest in the EU.
Just as “one country, two systems” benefits Hong Kong people, so remaining in the customs union would benefit people in NI, especially farmers and small and medium-size businesses; more than 90 percent of the NI businesses that trade with the Republic have less than 50 employees.
That is a major reason why, in the Brexit referendum in June 2016, 56 percent of people in NI voted to remain in the EU; in Britain as a whole, 51.9 percent voted to leave.
For the government in London, NI is not a significant economic player – it accounts for only 2 percent of the national GDP, compared with 23 percent for London. It is the second poorest region in the UK, after Wales, with a GDP per capita 27 percent below the UK average.
These are also good reasons for making NI an “SAR” and ensuring that it does not fall further behind.
The problem for British Prime Minister Theresa May and her Conservative government is political, not economic. Its majority in parliament relies on 10 members of the Democratic Unionist Party (DUP), the largest party in NI. It has said that, if the region were treated differently to the rest of Britain, it would withdraw its support. That would probably trigger a general election, which May’s party might well lose.
In the Hong Kong story, the DUP is equivalent to conservatives in Beijing who opposed a special status for Hong Kong, saying that it would create two kinds of Chinese. In the end, they were overruled.
This Monday Theresa May is due to meet European Commission president Jean-Claude Juncker for critical talks on the post-Brexit transition deal. The future status of the Irish border is the biggest issue to be resolved.
May and Juncker need the imagination of Deng Xiaoping and his advisers to come up with a skillful way to untie this Gordian Knot.
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