Brexit Deal Means Checks On Irish Border, Fitch's BMI Says
The U.K.’s exit from the European Union will probably mean some sort of customs checks will return to the Irish border, despite Theresa May’s assurances, a Fitch Ratings Ltd. unit said.
In an effort to unlock divorce negotiations, May last month guaranteed no hard border will re-emerge on the island of Ireland, while also promising no barriers between Northern Ireland and the rest of the U.K. will come into play after Brexit.
“These two objectives appear mutually exclusive,” BMI Research said in a note. “The term ’hard border’ is undeﬁned and could mean anything from a physical barrier between the two sides to a loose customs checkpoint, a range of options that could result in disagreements between the involved parties on what constitutes an acceptable or unacceptable border.”
BMI said it anticipate “sporadic custom controls” to monitor the cross-border trade of British and Irish merchandise. With about 15% of its goods exports going to the U.K., Ireland is the EU nation most exposed to Brexit. The country sends 35% of its food and drink exports to Britain.
“Regardless of the eventual solution, the encumbrance to trade for both sides would be signiﬁcant in the event of any major restrictions on the border,” BMI said.
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