‘Substantial’ north/south goods trade growth since Brexit
North/south goods trade has grown “substantially” since Brexit, a report by the Economic and Social Research Institute (ESRI) has found, with the Republic now accounting for over half of Northern Ireland’s exports.
The substantial growth in the cross-border goods trade has seen the Republic of Ireland record €160.3 billion in goods exports and €99.8 billion in goods imports in 2021, while Northern Ireland recorded totals of €10.5 billion in goods exports and €7.6 billion in goods imports, with this figure not including imports from and exports to Britain, which is not classified as international trade.
Most notable within the findings is the reassertion of the importance of cross-border trade to both economies, especially that of Northern Ireland, in the wake of Brexit. In terms of total trade, the Republic accounted for 11.93 per cent of northern imports and 28.58 per cent of exports, making it the second most popular location as both a destination and origin of trade behind only Great Britain (65.49 per cent of imports and 46.38 per cent of exports).
When trade with Britain is excluded, the Republic accounted for 53 per cent (€5.6 billion) of Northern Ireland’s goods exports, and 35 per cent (€2.6 billion) of its goods imports, making it Northern Ireland’s largest trading partner classified as international trade.
The “most striking difference” between the Republic and Northern Ireland, “and indeed to the rest of the EU” is the dominance of the US as both an import and export partner for the Republic.
The US accounts for 31 per cent of exports and 17.01 per cent of imports the Republic, with Britain second accounting for 14.15 per cent of imports and 8.84 per cent of exports, shares that “have reduced considerably in the aftermath of Brexit relative to the historic patterns of trade between the two countries”.
Having increased its share of the Republic’s imports from 1.5 per cent to 5 per cent in the first six months following Brexit, Northern Ireland accounts for 4.71 per cent of southern imports and 2.29 per cent of exports, “sizeable shares given the much smaller size of the Northern Ireland economy relative to the other top 10 partner countries”.
At the sectoral level, both states show a reliance on the chemicals and pharmaceuticals sector, which accounts for 55.7 per cent of the Republic’s exports and 20.2 per cent of its imports, the second largest import sector just behind machinery and electrical (20.7 per cent). Chemicals and pharmaceuticals are also the largest export sector in Northern Ireland, accounting for 23.4 per cent, and the largest import sector, accounting for 11.8 per cent. These figures are not in keeping with either the UK or the rest of the EU: in the UK, chemicals and pharmaceuticals account for 6 per cent of imports and 9.1 per cent of exports; in the EU, they account for 9 per cent and 9.6 per cent.
With both economies firmly aimed at the development of export-heavy industries, the ESRI says that cross-border trade can “play a role as an accessible first step into broader exporting and, hence, a greater degree of information on these flows and on how they compare to trade with other markets may help in the development of such policies”.
