DUBLIN – Britain’s share of imports to Ireland has been cut by two-thirds due to radical restructuring of supply chains through Brexit, according to one new analysis by Ireland’s leading economic think tank.
the Institute of Economic and Social Research The report, compiled with input from the Department of Finance and Trinity College Dublin, measures the sometimes staggering development of merchandise trade with Britain since the shock of the 2016 referendum and the deployment of new import controls at the port from Dublin earlier this year.
Unlike other studies, Tuesday’s report seeks to eliminate the effect of global supply bottlenecks created by the COVID-19 pandemic and provide data that is Brexit specific.
His main finding: Britain accounted for almost a quarter of the value of all the Republic of Ireland’s imports before the Brexit vote, but barely 7% since Brexit became a trade reality this year .
Most of these market share losses can be attributed to the introduction of the Trade and cooperation agreement at Irish ports of entry on January 1, when the EU’s single market requirements for health and customs controls on imports came into effect on goods from Britain.
The report also documented how the Withdrawal Agreement Irish Protocol transferred a substantial part of this lost UK trade to North Ireland, the only part of the UK still able to trade unimpeded with the Republic of Ireland.
Before the Brexit vote, he found, Northern Ireland supplied just 1.5% of the Republic’s imports in terms of value. These trade levels have changed little over the long years of EU-UK negotiations. But within two months of the protocol going live, Northern Ireland’s contribution climbed to 5%.
In UK internal terms, the change brought about by the protocol is much more dramatic.
UK manufacturers and distributors supplied 23.2% of all Irish goods imports in 2015, and retained a 16.5% share in early 2020, even as Irish authorities braced for a Brexit without agreement. But Britain’s market share fell after the introduction of the Irish Sea border to just 7.2 percent.
At the same time, many producers in Northern Ireland – who traditionally supply milk, beef, pork and lamb for treatment in the Republic – has seen demand from the south soar, according to report co-author Martina lawless.
“There has been a big increase, from 80 to 90 percent, in many products from Northern Ireland,” she said. “Northern Ireland’s share in total UK imports [to Ireland] fell from 6% in 2015 to almost 40% in the last year.
While virtually all sectors of UK manufacturing have lost market share in Ireland, food and drink suppliers have suffered some of the biggest drops.
Before the Brexit referendum, companies based primarily in England supplied almost a third of food and drink imports to Ireland.
The UK market share of food imported to Ireland suffered only minor losses until this year, when it plunged below 12% as supermarkets turned to suppliers from Northern Ireland and continental Europe.
UK losses in drinks exports have been worse, dropping from 31 percent of all Irish imports in 2015 to just 9 percent this year. Northern Ireland, home to Bushmills whiskey and the bottling plants of many brands, has seen the value of its drink exports to the south quadruple since the Brexit vote, mainly this year.
Lawless said Britain’s loss of market share after Brexit in Ireland “is likely permanent”.
The impact of Brexit on Irish exports to Britain has been less pronounced, in part because the British have yet to start enforcing their own trade borders with the EU. Britain initially pledged to do so in October 2020, but postponed enforcement twice on Irish products, most recently last week, when it suspended the decision indefinitely.
Yet Britain, once Ireland’s dominant trading partner, is already a shrinking slice of the Irish export pie.
While UK consumers may view Ireland as primarily a source of butter and beer, Irish chemicals – mostly produced by US pharmaceutical and engineering multinationals with EU operations in Ireland – are on the market. origin of a pandemic-proof export boom focused on Europe, North America and Asia, not Britain.
These chemicals, including the active ingredients in vaccines and other medicines, now account for 63% of the value of Ireland’s global exports, including a quarter of goods shipped to Britain.
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