AN EU expert has said the Scottish Government and the SNP are "tip-toeing around" the issue of the Border between Scotland and the rest of the UK after independence.
In analysis on her blog Kirsty Hughes, the founder of the Scottish Centre on European Relations, found if you add countries in the European Economic Area or customs union (such as Norway, Switzerland and Turkey) to Scotland's EU exports, then in manufacturing, the exports total is almost the same as manufacturing exports to the rest of the UK.
She said this means if you put a hard border between Scotland and the rest of the UK (rUK) on manufacturing but open it up to EU then there is almost no net economic loss.
In a blog post titled ‘Independence and the Border: Some Key Questions’, Hughes said: “The border question has been mostly tip-toed around by the Scottish government and SNP with a lack of serious analysis of its implications. The reason for this caution is clear: the impact of Brexit and the fear that gaining control of borders might rather be negative.
“In 2014, the debate was whether an independent Scotland could have stayed in the EU – thus ensuring open borders for people, goods, services and capital with both Scotland and rUK in the EU’s single market and customs union. Now, under the hard Brexit of the Trade and Cooperation Agreement, independence means a harder Scotland-rUK Border. It is a big change and challenge.”
In 2018, Scotland’s exports to the EU were only 31% of its exports to the rest of the UK (while its total international exports were 66% of its exports to rUK). An Aston University study found that, even before leaving the single market, the impact of Brexit was to reduce UK services exports over 2016-2019 by £113 billion, compared to what they would have been otherwise, while Ireland’s services exports were around £126 billion higher than they might have been in the absence of Brexit.
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Hughes said an independent Scotland rejoining the EU would be “the opposite of an isolationist Brexit”.
She added: “Politically, an independent Scotland would be leaving a UK that has chosen a relatively isolationist and belligerent approach to its neighbour, the EU – the political and economic bloc that it was so recently a leading member of.
“Unlike the UK, an independent Scotland would be re-joining the 27-member state EU, with its population of 450 million, with all the political, social, cultural, and economic benefits that offers. Politically, it would be the opposite of an isolationist Brexit.
“Scotland would also be cutting its constitutional ties to a UK political system that has allowed such a self-damaging and fundamental change to the UK’s position in the world.”
Hughes said Scotland’s exports to the EU are 61.5% manufactured goods but manufactured exports to rUK are only 22%, and 58% services. This means that Scotland’s manufactured goods exports to the UK are not that much higher than to the EU – £11.3bn to rUK in 2018 and £9.9bn to the EU.
She said: “The real economic challenge from the border to rUK is then notably in services (58% of Scotland’s exports) and also in utilities (11% of Scotland’s exports) – though this is not to say that sensitive deliveries such as supplies to supermarkets (as seen for Northern Ireland) will not also be affected.”
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Hughes mentioned the 2018 Growth Commission report’s target to double Scotland’s overall international exports. She said if Scotland’s current figure of 48% of exports to the EU doubled – or increased to match those of Denmark or Finland (at around 60% of exports) or Slovakia (at 85% of exports to the EU) then then the impact of a harder border to rUK would lessen over time.
But Hughes warned: “There are tough questions here: how could this shift be achieved, is it feasible, how long would it take – and under what different scenarios and assumptions on key variables including: growth rates, investment, migration, services trade with rUK, time to re-join the EU and so on.
“On the trade and border challenge, detailed economic analysis and scenario-building is needed of under what circumstances, and over what time period, and through what types of transition, the costs of having an EU external border between Scotland and rUK can be off-set against benefits of independence in the EU.
“It is time to face up to the Border challenge.”
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