ESRI: Brexit has led to huge increase in Irish trade with fall-off in Irish Sea commerce

Research published today by the Economic and Social Research Institute (ESRI) and Department of Finance examines the impact of Brexit on Irish trade with Great Britain and the north in the first half of 2021.

The ESRI says the research separates the impact of Brexit in January 2021 from other drivers of changes in trade patterns, including the COVID-19 pandemic.

According to its analysis there has been 'a sharp decline in trade between Ireland and Great Britain since January 2021, while trade between Ireland and Northern Ireland has increased considerably'.

The report shows that the share of Great Britain imports to the 26 counties declined from 23 per cent in 2015 to 7.2 per cent in early 2021.

The share of Irish exports to Great Britain also declined but by a smaller amount (from 10.9 per cent to 6.3 per cent).

The ESRI states: "Some individual sectors have faced substantial reductions in their exports to Great Britain, with the food and beverages sectors particularly negatively impacted. The overall asymmetric impact is due to the more gradual introduction of customs procedures on inward goods in Britain, with a range of checks still to be implemented in 2022."

The new research shows that trade within Ireland has soared as a result of Brexit.

"The decline in the share of Great Britain in total Irish imports is slightly offset by an increase in imports from Northern Ireland. The share of Northern Ireland in total Irish imports has increased from 1.5 per cent in 2015 to 5 per cent in the aftermath of Brexit.

"The key sectors driving this shift have been food and beverages. This supply reorientation means that the share of Irish imports from the UK originating in Northern Ireland has increased from 6 per cent to over 40 per cent," the ESRI says.

The report’s co-author Martina Lawless commented: “Although many supply chain challenges have come together since the onset of the COVID-19 pandemic, the greatest driver of the reduction in Irish imports from Britain can be traced to a Brexit effect. There has been a less substantial impact on exporters so far, but these are at risk of higher costs as more customs checks are introduced over the next year.”