Brexit slashes Britain’s market share in Ireland – POLITICO


DUBLIN — The share of British imports into Ireland has been cut by two-thirds due to the radical restructuring of Brexit supply chains, according to new analysis from Ireland’s leading economic think tank.

The report by the Institute for Economic and Social Research, compiled with input from the Department of Finance and Trinity College Dublin, measures the sometimes staggering change in goods trade with Britain since the shock of the 2016 referendum and the rolling out new import controls at Dublin Port earlier this year.

Unlike other studies, Tuesday’s report seeks to rule out the effect of global supply bottlenecks created by the COVID-19 pandemic and provide Brexit-specific data.

Its main finding: Britain accounted for almost a quarter of the value of all imports to the Republic of Ireland before the Brexit vote, but barely 7% since Brexit became a commercial reality this year .

Most of these market share losses can be attributed to the introduction of the Irish Ports of Entry Trade and Cooperation Agreement on January 1, when EU single market requirements for health checks and import customs came into force for goods coming from Great Britain.

The report also documented how the Irish Protocol to the Withdrawal Agreement shifted a significant portion of this lost UK trade to businesses in Northern Ireland, the only region of the UK still able to trade barrier-free. with the Republic of Ireland.

Prior to the Brexit vote, he found, Northern Ireland supplied just 1.5% of the Republic’s imports by value. These trade levels have changed little over the long years of EU-UK negotiations. But within two months of the protocol being in place, Northern Ireland’s contribution jumped to 5%.

In internal UK terms, the protocol-related change is far more dramatic.

UK manufacturers and distributors supplied 23.2% of all Ireland’s goods imports in 2015 and retained a 16.5% share at the start of 2020, even as Irish authorities braced for Brexit without agreement. But Britain’s market share fell after the introduction of the Irish Sea border to just 7.2%.

Simultaneously, many producers in Northern Ireland – who traditionally supply milk, beef, pork and lamb for processing in the Republic – have seen demand from the south soar, according to the co-author of the report, Martina Lawless.

“There has been a big increase, 80-90%, of many products coming from Northern Ireland,” she said. “Northern Ireland’s share of total UK imports [to Ireland] has risen from 6% in 2015 to almost 40% over the past year.

While virtually every sector of UK industry has lost market share in Ireland, food and drink suppliers have suffered some of the biggest declines.

Prior to the Brexit referendum, businesses based largely in England supplied nearly a third of Ireland’s food and drink imports.

Britain’s market share of imported food in Ireland suffered only minor losses until this year, when it fell to less than 12% as supermarkets turned to suppliers from Northern Ireland and other parts of Ireland. continental Europe.

Britain’s losses in drinks exports have been worse, falling from 31% of all Irish imports in 2015 to just 9% this year. Northern Ireland, home to Bushmills whiskey and bottling plants for many brands, has seen the value of its drinks exports to the south quadruple since the Brexit vote, mostly this year.

Lawless said Britain’s loss of market share after Brexit in Ireland “is likely to be permanent”.

The impact of Brexit on Irish exports to Britain has been less pronounced, partly because the British have yet to start enforcing their own trade borders with the EU. Britain originally pledged to do so in October 2020 but has twice postponed enforcement of the Irish Goods Act, most recently last week when it suspended the decision for a period of time. indeterminate.

Yet Britain, once Ireland’s biggest trading partner, already accounts for a dwindling slice of the Irish export pie.

While UK consumers might see Ireland as a main source of butter and beer, chemicals produced in Ireland – mainly produced by American multinational pharmaceutical and engineering companies with European operations in Ireland – are driving an export boom. pandemic-proof focused on Europe, North America and Asia. , not Britain.

These chemicals, including active ingredients in vaccines and other medicines, now account for 63% of the value of Ireland’s global exports, including a quarter of the goods shipped to Britain.

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