Ireland urges Britain to remain in Customs Union after Brexit

Ireland (Other OTC: IRLD - news) has ruled out electronic tagging on its border and urged the UK to remain in the EU's Customs Union to minimise the impact of Brexit on the Good Friday Agreement.

Dan Mulhall, Ireland's ambassador to the UK, told Sky News "a hardening of that border is going to create so many problems that it cannot be contemplated".

Mr Mulhall, who is taking up a new position as Ireland's chief diplomat to the US in August, said Britain should instead remain in the Customs Union and suggested the UK Government's position might shift as Brexit talks intensify.

Ireland, in tandem with its EU partners, is playing hardball on the creation of a new EU border on the island, insisting it will not accept a hard border, or even any technical post-Brexit border solution - such as electronic tagging - to allow free flow of trade across the 350-mile frontier.

EU officials suspect the UK might try to use such an arrangement in Ireland as a "Trojan horse" to roll-out electronic monitoring across the continent in order to achieve its goal of "frictionless trade" with key trading partners while also remaining outside the Customs Union.

Such an outcome for Britain would go against the European Commission's position that Brexit cannot be cost-free for the UK.

"Our hope and wish is that Britain should remain as closely connected as possible with the EU and one aspect of that would be if Britain were to remain in the Customs Union," said Mr Mulhall, from his ambassador's residence in central London.

"That's clearly a matter for the British Government to decide but I do notice there is a lot more discussion, recently, on the Customs Union and the pros and cons of being in the Customs Union.

"And I notice also there's a greater emphasis now on the need for perhaps a transition period that would avoid any kind of cliff edge."

Resolving the Irish border problem is one of the three top priorities of the first phase of Brexit negotiations, alongside the UK's exit bill and EU citizens' rights.

David Davis, the Brexit Secretary, said on Thursday "flexible and creative solutions" would be needed to resolve the Irish border problem when Britain quits the EU, which would leave Ireland inside the bloc's Single Market and Customs Union and Northern Ireland out.

Mr Mulhall said Ireland would work with the UK Government to "find these creative solutions" but added: "Nobody is saying that this is easy street, I couldn't tell you at the moment what the solutions that the issues that arise on the border in Ireland might be."

The diplomat, who has been Ireland's ambassador to the UK for four years, also said he was "personally quite sad" his departure from his post had coincided with Brexit.

"When I first arrived here... there was no real question of Britain leaving the EU, I now leave as Britain is negotiating its exit from the Union and that makes me personally quite sad," he said.

"EU membership was a huge benefit to British-Irish relations... it helped bring peace to Northern Ireland.

"For all of those reasons, and for our close bilateral relationship, personally Ireland will miss the UK badly and I personally feel sad that my time here, so memorable for so many reasons, has also coincided with the unfortunate development in Britain deciding to the leave the EU."

Mr Mulhall said he expected bilateral relations between the US and Ireland to develop in the wake of Brexit.

He said: "I don't think it's a question of replacing the UK, the UK is a country of a different size and global role than Ireland could ever aspire to having.

"But nonetheless our status within the EU vis-a-vis will probably become more important to our partners because at some point Britain will no longer be a member state."