Nick Hubble – Capital and Conflict (United Kingdom) –
My resignation from Capital & Conflict is pending. It hinges on the Brexit negotiations. And the suitability of property for sale in Ireland and Northern Ireland.
Perhaps you can help. I’m looking for a pair of properties – one either side of the border. And soil suitable for tunnelling in between them.
My plan is to establish the premier smuggling infrastructure into the EU. With a little political help, it could be a gold mine. And things certainly look to be going that way.
The Brexit negotiations have taken a turn for the worse. The EU and UK presented their visions for Brexit and discovered they’re not terribly similar.
Within each camp, the divisions are immense too. The result of so many factions is a complete mess. No one deal can possibly make any majority happy, anywhere.
Of course, Prime Minister Theresa May saw all this coming. Imagine an election taking place with a specified Brexit deal on the table. Hardly anyone would vote for a government that presented a concrete plan. Everyone would realise it’s a compromise that makes no happy.
And so we had the early election that weakened May instead. And the EU was quick to adjust its tactics. While May relies on support from Irish MPs, it’s the Irish question that the EU has made the centrepiece of negotiations.
Juliet Samuel of The Telegraph carefully explained how this developed. Britain made promises about the Irish border. These are now being used to position the rest of the Brexit negotiations to the favour of the EU.
The issue of the Irish border has cornered British politicians in the following way. If Britain wants to keep its promises for a frictionless border in Northern Ireland, and to keep Northern Ireland as part of the UK’s economic zone, then the UK itself will have to remain part of the EU’s customs union.
Otherwise there will be too much smuggling…
Now this is a stupid argument to anyone outside of Brussels and Westminster. The reality on the ground is wildly out of whack with the way politicians see the world. They think people follow their rules and society brakes down in the absence of such rules. We have to have something in place to tell people how to behave when it comes to trade. No free trade agreement or customs union means no trade in the mind of a politician.
But it’s the opposite. The more rules, the more opportunities to smuggle.
If smuggling is the issue, then a hard Brexit is the bad scenario. Because that’ll maximise the amount of trade restrictions, maximising the amount of smuggling which occurs.
A Brexit with a trade agreement will of course feature plenty of smuggling too. But we already have that now – with Britain inside the EU and customs union. In fact, Irish smuggling on the border is as old as the country itself.
But what really irritates me is that the EU says we cannot leave the customs union without implementing border controls. Why?
Why not leave the customs union and then implement no border controls? There is no reason this cannot happen. Simply don’t post the border guards, don’t build any border infrastructure and leave people to go about their business.
If the EU wants to set up border infrastructure, then it can. But that makes the real problem obvious – the EU itself, not Brexit. It’s the EU that would prevent trade, free border flows and more.
Trade and border regulation doesn’t have to happen at the border. Especially if you want to get at the smugglers. It happens at the business, welfare and taxation level.
The Irish are perfectly aware of this. Especially if they live near the border. It’s been part of their way of life since the country came into existence.
“It might be seen as populist to smuggle in the community I live in,” said Declan Breathnach, an Irish MP. The news organisation Politico reports just how entrenched this culture of smuggling is:
Cross-border arbitrage runs from legitimate bargain hunting to black-market trade. Older residents of border towns fondly reminisce about smuggling butter or tea to get around food restrictions in place before the 1970s. The later exploitation of EU farming payments by moving animals over the border is even celebrated in song. And although they are illegal in the Republic of Ireland, fireworks smuggled down from Northern Ireland light up the skies of Dublin every Halloween.
This isn’t on a small scale either. Markets are regularly deliberately held in fields straddling the border so that you can get the items in the jurisdiction they’re legal or cheaper in. Fuel is taxed differently, peat and coal are too. There are between 10 and 12 gangs in the fuel smuggling business alone. The total cost of illicit trade to the Irish government is between €800 million and €1.5 billion.
And it’s not just Ireland.
In Moldova, a suspicious amount of classy new Land Rovers sit at dilapidated border properties. Smuggling is enormously lucrative there.
And those smugglers are the key source of opposition to joining the EU. It’ll make their enterprising ways far less risky. And far less lucrative.
It seems like the UK and Ireland already have a smuggling problem. Let alone the EU on its other borders.
Smugglers don’t need backdoor in Northern Ireland when they have a front door on Europe’s many other borders.
Consumer sovereignty is more important than national sovereignty
Of course, the real reason for smuggling isn’t about regulations or customs unions. It’s about costs. That’s why smuggling is such a popular activity already inside the EU.
In fact, it seems smuggling on the Irish border is somewhat of a crowded trade even though Brexit hasn’t even happened yet.
But Brexit does pose an opportunity to smuggle for reasons other than profit.
Thanks to my smuggling operation, bendy cucumbers will travel into Ireland. Water specifically designed to prevent dehydration – and labelled as such – will sneak across the border. Curved bananas and eggs priced by the dozen will be available at secret locations across the EU.
That house Bill Bonner has purchased in Ireland will be my storage warehouse. From Waterford docks we’ll ship the illicit goods to Germany, France and Italy.
Damn national sovereignty. Consumer sovereignty is the only sovereignty I’ll abide by. And that’s a cause worth fighting for.
Until next time,
Capital & Conflict