How a no-deal “open border” could destroy the UK economy:
The EU would need a physical border to check goods coming into the Republic of Ireland from Northern Ireland in the event of a no-deal Brexit.
Although in theory, the UK could decide not to impose checks on goods moving the other way (i.e. from the Republic into Northern Ireland). This could make a hard border slightly softer.
But there’s a catch: under WTO rules, unless you’re in a free trade bloc like the EU or NAFTA, you have to obey the “most favoured nation” rule.
That means if you lower trade tariffs for one trading partner, you have to lower tariffs to all your other partners. Professor O’Donoghue explains:
“If the UK chooses not impose any tariffs on goods coming across the [Irish] border… that would mean that the UK is giving the EU (because Ireland is the EU in this context) complete open access. So its most favoured nation tariff is zero. That means it would have to give a zero tariff access to every single country in the WTO.”
Now, the idea of the UK scrapping tariffs altogether isn’t entirely out of the question, according to some advocates for hard Brexit. Regular FactCheck readers might remember this proposal featured on the famous “Wetherspoon manifesto”, and was printed on half a million beermats across the pub chain’s 800-odd branches.
But doing so could have a devastating impact on UK businesses.
Back to our researchers at the Universities of Birmingham, Durham and Newcastle, who explain: “the impact upon the agri-food and farming sector is particularly revealing. Most agricultural products and livestock are subject to EU import tariffs of between 6% and 22%.”
“UK agri-food products would either have to compete with heavily subsided EU produce on the global market… or target sales within the UK to avoid import duties. It is likely that suppliers will use the cheapest available option which, due to CAP subsidies, may very well still be EU products”.
In other words, abolishing import tariffs could mean that UK producers are priced-out of UK and EU markets.