The realities of a hard Brexit are unfolding day by day. If the UK ends up out of both the single market and the customs union, as appears increasingly likely, the damage to the economy of Ireland will be substantial.

The hardest form of Brexit would be exit with no deal on successor arrangements with the EU. Theresa May, in her 17 January speech at Lancaster House, stated that no deal would be preferable to a bad deal. This choice of words suggested that calculations had been done on the consequences of a bad deal, which has been taken to mean the default of trade with Europe on World Trade Organisation terms, which means tariffs as well as the costs of customs delays.

The implication was that this outcome was acceptable against whatever a bad deal might look like.

The Brexit secretary David Davis revealed to a House of Commons committee last week that no calculations on the economic impact of failure to reach a deal have been undertaken, to the considerable surprise of committee members. How could the prime minister have concluded, eight weeks earlier, that a no-deal outcome was preferable to an unspecified bad deal if nobody had done the sums?

The referendum result was a narrow majority for exit from the European Union. This could have been accomplished, to the letter, while remaining in the single market and also in the customs union, in which case there would have been no requirement for a transition trade deal after the exit date.

The British government has chosen unambiguously to exit the single market and has announced that decision. Exit from the customs union looks highly likely although there is some wriggle room in official statements.

Free movement

Exit from the single market could have been avoided only had the UK agreed to the continuation of free movement, that is, no immigration controls. While none of this was on the ballot paper on 23 June last, immigration played such a prominent role in the referendum campaign that the government could hardly have agreed to interpret the result as sanctioning continued single market membership.

The customs union is different. Britain could have quit the EU, including the single market, while remaining in the customs union. The consequence would have been retention, in trade with the rest of the world, of the EU’s external tariff, permitting goods to circulate freely inside Europe without tariffs or customs delays.

But the government has been persuaded that there are such exciting opportunities to do new trade deals outside Europe that this would have been a big additional sacrifice. Ministers have been on trade missions around the world and have been hosting visiting politicians in London.

The suggestion is that, freed from the shackles of Europe’s common external trade policy, Britain can do better. No studies have been released which back this up, and if the evidence of David Davis last week is any indication, no studies exist. Regular expressions of optimism from Brexiteer ministers about these extra-European opportunities have even spawned a rebranding slogan, Global Britain, to keep the spirits up.

The trouble is that trade experts are not convinced that losses in Europe can be made up through extra business elsewhere. Membership in the European Union is sometimes portrayed as some kind of constraint on Britain’s trade with more distant markets.

But this is not really the case – EU members are free to trade around the world at, in most cases, fairly low tariffs, in some cases none, and all EU members deal on the same terms. If departure from the EU opens up such exciting vistas for Britain, how come other countries have failed to spot this opening and headed for the door? The climate for one-off British trade deals with countries outside the EU trade bloc are in any event unpromising right now – Donald Trump has embarked on one of America’s periodic lurches into protectionism and there are rising anti-trade sentiments elsewhere.

Immigration

Departure from the single market thus offers Britain what the voters, wisely or not, appear to regard as a tangible benefit, namely control on immigration. The benefits of quitting the customs union are not so clear and the results could be disappointing.

Countries outside the EU can retain de facto membership in the customs union. Turkey has such a relationship. If Britain is inevitably departing the EU and its single market it would greatly mitigate the overall impact on Ireland if the UK stayed in the customs union.

Irish deal

When the Irish Government comes to define its input into the EU negotiating strategy, it should consider whether a deal on, for example, the €60bn exit fee could be offered in order to keep Britain in the customs union. It might in truth cost Britain little.