Can high-tech solutions fix border issues?

In May 2018, the Leave Means Leave organisation issued a report called ‘Max Fac works: The Technological Solution to the Irish Border Customs Issue’.  The report says that existing technology and best practice is “more than capable of permitting a friction-free border”.   The report was welcomed by pro-Brexit MPs including Sammy Wilson of the DUP who commented that “As this report makes clear – Max Fac is the only option the Government should be pursuing… A technological solution to the border issue can be in place by the time Britain leaves the EU but only if the Government takes the necessary steps to meet this end.”  References are made in the report to both the Norway-Sweden and UK-Canada borders as examples of this kind of maximum facilitation or “max fac”. 

The Canada-US border is one of the most technologically sophisticated in the world;  it is using cutting-edge technology. That provides a concrete example of how some of this might work in practice. One of the things that they have done on the Canada-US border is they have a pilot customs pre-clearance programme. The idea is that trucks/cargo will be able to be cleared before they reach the border, to facilitate movement across the border, so you do not get massive back-ups of trucks waiting to go through customs there.

The way this works in practice is that they put a customs officer inside a factory in Canada, for example, where a good is produced, and the customs officer will clear the goods in the factory. They use technology to monitor and to track the truck moving to the border to ensure that it does not deviate from its route. They also use an electronic seal on the cargo container to make sure that the goods are not opened or tampered with en route.

The issue with this is that you need the customs officer on the factory floor to do the clearance there if they are not going to do the clearance at the border. This is quite effective as a programme. It does help to pre-clear the goods; they get across the border smoothly and quickly. The problem, as you can imagine, is the costs involved. If you need to place a customs officer in your factory, this is something that is an option for big companies that are exporting a large volume of very high value-added goods to the US. In Canada and the US, it is primarily the auto industry that has been using this option. As you can imagine, for most companies, especially virtually all small and medium-size enterprises, this is not even a possibility.

There are technological solutions to try to facilitate trade, but they add immense cost and inefficiencies. At the Canadian border, this has not solved the problem. The Canada-US border still routinely has massive backlogs of trucks lined up for miles waiting to cross the border, so there is no easy technological fix to try to get goods quickly across the border.

As regards the Norway-Sweden EU border, it is important to note that studies have shown that Norwegian firms still complain, even with the best possible conditions for making that border as smooth and as frictionless as possible. Norwegian businesses apparently complain that it is still an encumbrance, it is still a hassle and a delay to try to get through that border and it is impeding their flow of goods, even in the best possible circumstances.

This article draws on evidence given by Dr. Hopewell to the Westminster Scottish Affairs Committee inquiry into "Scotland and Brexit: Trade and Foreign Investment" on 5 June 2018.

 

 

 

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Kristen Hopewell's picture
University of Edinburgh
13th September 2018
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