The UK are seeking a ‘virtual’ border with the EU, using Northern Ireland and the Republic as a template for a new Customs deal.
Enda Kenny, Ireland’s prime minister, was in Brussels on Thursday to press the case for a Brexit deal that ensures the free flow of cross-border trade without the need for checks. Trade between Britain and the EU would be subject to Customs declarations and physical inspection of goods in all of the Brexit scenarios currently mapped out by the government. Mr Kenny said the best outcome would be to have arrangements “as close to what we have at the moment”. British ministers believe that the “virtual border” they hope to create in Ireland — which relies on light-touch inspection — could become a template for UK trade with the rest of the EU. One EU official said that trucks could be inspected at discreet road stations away from the border, but there was no avoiding the fact that checks would have to happen.
The UK's ability to create a “virtual border” will depend on the success of its new customs declaration service system (CDS), which is due for launch in January 2019, just months before Britain’s scheduled Brexit date. CDS will replace the CHIEF system, which processes more than 60m customs declarations a year, but one Whitehall official said it was “hopelessly unsuited” to the 350m applications that are expected when Britain leaves the customs union. HM Revenue & Customs insists that CDS “will be able to process a much greater volume” than its predecessor but Whitehall officials believe both Britain and other EU members will need to invest more to cope with Brexit.
Although other EU countries will see this as a problem for Britain, the UK has a £96bn deficit in goods with the rest of the EU, suggesting both sides have an interest in making trade easy. A digital border with spot checks on some shipments could also ease congestion at big UK ports and ensure that Irish Sea ferry crossings are not disrupted.