The UKPM is in Ireland today, apparently negotiating a post-Brexit deal on the UK's only land border with the EU.
What are the important parameters to this apparently intractable problem?
First the negotiations must be about establishing the 'rules of the game' before it has been played. They will get no where if either side tries to win the game before it had been played for obvious reasons.
The 'game' is economic and the players are the politicians. Neither side are in a position to predict who the winners and losers will eventually turn out to be in a changing economic landscape. However, the respective governments must be in a position to regulate their own economies through legislation in order to remain competitive.
Second, if both sides agree that there are to be no physical borders between the UK and the EU then they will have to be virtual ones.
I am no logistics expert but my understanding of a virtual border is that it is eminently possible.
It is after all, already possible to track the passage of any package you have ordered on the internet across international borders, in real time.
'Just-in-time' delivery systems, that require the second by second monitoring of commodities via barcodes up to the moment you pay for goods at the cash register, are part of the Lean Six Sigma model. This was originally promoted by Toyota and has since been adopted by the NHS.
Add to that automatic vehicle registration monitoring and weigh stations at borders and there seems little that needs to be done in terms of the legal trafficking of goods and services. The illegal trafficking of goods and services is another matter.
Thirdly, because of the potential for a proliferation in illegal imports and exports across a relatively permeable border after Brexit, it has to be recognised by both sides that it is in their best interests to be able to collect tax revenues on their respective imports and exports. This gives the players of the game the mechanisms by which they can make their regulatory moves.
This means that there really are only two main questions that needed to be answered in order to agree the 'rules of the game':
• What level of information sharing can be expected after Brexit?
And
• What level of security co-operation can be expected after Brexit?
This means that a 'common rule book' to ensure both sides follow the same standards and regulations on the production and taxation of goods could continue to be a politically negotiable agreement between the UK on one side and the EU on the other.
If each party to the agreement is free to 'police' the passage of goods and services across borders then there is plenty of room for economic innovation and evolution within their respective free-trade areas.
Fourth, both sides need to recognise that both the EU and the UK have an invested interest in such a system and what these invested interests are that will maintain their contractual agreements after any agreements have been made.
The Euro is vulnerable, in a way that the US dollar is not, precisely because currently there are no internal gearing mechanisms with which the European Bank can regulate its consituent (National/Federal) economies.
The UK, is an island economy predicated on trade and commerce, that needs to trade more freely with the rest of the world for its economic (and political) survival.
The implications for both the EU and UK are that there will be fluctuations across different markets that impact on their tax revenues and the strength of their currencies on world markets.
If the logistic and accounting practices are good enough, as they will have to be, then any regulatory remunerations between the systems can be worked out as part of the ongoing negotiations.
The only problem for the UKPM then is that actually, this would not be that different from what already happens with the UK as a full member of the EU. However, it does remove the political imperative for the UK to one day become a part of a larger Federal State.
