BREXIT has profoundly changed trade relations between the United Kingdom and the European Union. Due to customs controls, delays and increased costs, Irish exports moved away from the UK in favor of direct trade with the continent.
The impact this will have on the UK and Irish economy will not be fully realized for a few years, but it is clear that changes in trade flows will be with us for the foreseeable future.
Thanks to the NI protocol, Northern Ireland can trade freely with the European Union and is therefore not as affected as the rest of the UK by the new trading environment. Thus, in 2021, imports from Northern Ireland to Ireland increased by 77.76%, to a value of 776 million euros.
In addition, Irish exports to the UK also increased in 2021 by 10.29%. This indicates that businesses in Northern Ireland are channeling their trade to Ireland and then to Great Britain.
In early 2021, as businesses and carriers adjusted to their new normal in terms of trade, supply chains were severely disrupted, especially in Northern Ireland. Supermarkets had much less stock, which reduced options for customers.
This problem lessened over time as the new system was ‘entrenched’ and we can now see that this is largely due to the fact that companies in Northern Ireland have chosen to rethink their chains. supply to pass through the EU rather than Great Britain.
As a result, Ireland’s exports to Northern Ireland increased by 42.88%, to a value of € 473 million. Exports from many EU countries to Ireland have increased sharply this year, imports from France have increased by 43% and those from the Netherlands by 50% compared to the same period last year.
Given the sharp increase in Irish exports to the north, we can assume that a large part of this European trade ends up on the shelves of Northern Ireland.
It’s not just Northern Ireland that has diverted trade from the UK, imports from Britain to Ireland have fallen 32.33% this year as Irish companies focus on diversification of their trade routes outside the UK.
So-called ‘roll-on, roll-off’ shipments between Ireland and the EU increased by 99% from 2019 levels, and although part of this increase is attributed to increased imports from the mainland to Northern Ireland via Ireland, Irish companies have also focused on diversifying their trade outside the UK. The EU remains Ireland’s largest trading partner, followed by America with the UK, Ireland’s third-largest partner.
The extent of the disruption Brexit has caused to the European and British trade markets will not be known for a few years, but it is clear that the loss of Britain is to the benefit of Europe. The UK government’s insistence on leaving the EU’s single market has made it very difficult for them to trade with the EU.
Trade will always follow the path of least resistance and with the UK posing increased costs, delays and problems for exporters, it is natural to seek new markets while expanding their existing trading relationships.
No one wants to see empty supermarket shelves or hear about companies having major problems accessing goods because of Brexit. But that’s what the UK government committed to when it decided to push for a tougher Brexit. They did so knowingly.
That those caught in the middle of it, including Ireland, north and south, seek to take advantage of it where we can is natural.
The point is that the change in the business relationship must not have been so sudden; companies didn’t have to scramble to change their supply chains to keep food on the shelves. In this post-Brexit adjustment, we need to play the hand that has been dealt to us and profit from it where we can.
:: Neale Richmond is TD Fine Gael for Dublin Rathdown and party spokesperson for EU affairs.