Issues

Cross border trade up almost 60 per cent

The value of trade across the island of Ireland has risen by over 57 per cent since the UK left the European Union at the end of 2020.

The value of combined import and exports between north and south were almost six times greater in the first five months of 2021, compared to the same period last year.

Brexit and checks on goods travelling from Great Britain to Ireland, north and south, since the introduction of the Northern Ireland Protocol in January 2021, have been attributed to the drastic rise in the levels of exports and imports this year.

The value of goods travelling from Northern Ireland to the Republic of Ireland rose 77 per cent between January to May 2021 compared to the same period in 2020, while the value of goods travelling from the Republic of Ireland to Northern Ireland rose by 38 per cent.

The surge in cross-border trade was described by the UK’s Brexit Minister David Frost as representing the “problem” of the Northern Ireland Protocol.

Frost claimed the rise as evidence that Northern Ireland businesses could not use their “first choice” suppliers and told a House of Lords committee that it did not make sense for the UK Government to “encourage more of that development”.

In May 2021, the value of goods travelling from Northern Ireland to the Republic of Ireland was €356 million, compared to €138 million in May 2020, a 158 per cent rise. The value of goods travelling in the opposite direction was €256 million in May 2021, compared to €159, million in 2020, a 61 per cent increase.

The trend of rising cross border trade looks set to continue given the steady month on month increase in both imports and exports between north and south in 2021. Figures from the CSO show that the value of goods travelling from Northern Ireland to the Republic of Ireland has increased every month of 2021 up until May, rising from €144 million in December 2020, the month before the Northern Ireland Protocol came into effect, to €356 million in May 2021.

The value of goods travelling from the Republic of Ireland to Northern Ireland has also increased from December 2020’s figure of €168 million to €256 million in May 2021, however, a €30 million drop in the value of exports from the Republic of Ireland to Northern Ireland was recorded between April and May.

For the first quarter of 2021, Northern Ireland’s exports to the Republic of Ireland were up for 44 per cent, while exports from the Republic of Ireland to Northern Ireland were up 22 per cent.

Great Britain

The rise in the value of cross-border trade is happening in the context of a probable decrease in levels of trade between Ireland, north and south, and Great Britain. Statistics on trade between Great Britain and Northern Ireland are only produced once a year and the current release is not reflective of the trade period post-Protocol, however, figures for trade between Republic of Ireland and Great Britain are available from the CSO.

The Republic of Ireland increased the value of its exports to Great Britain by over €260 million in May 2021 compared to May 2020. The 28 per cent rise to €1,209 million means that Great Britain now accounts for 9 per cent of the Republic of Ireland’s total exports.

The value of goods exports to Great Britain from the Republic of Ireland in the first five months of 2021 was €5,304 million, an increase of 12 per cent on the first five months of 2020. However, imports from Great Britain decreased by 24 per cent (€301 million) to €927 million compared with May 2020. Imports from Great Britain were 11 per cent of the value of total imports in May 2021.

The value of goods imports from Great Britain for January to May 2021 was €4,246 million, a 35 per cent decrease compared with January to May 2020.

Speaking to the Northern Ireland Assembly’s Economy Committee in May, a senior department official suggested that Great Britain traders exporting to Northern Ireland needed further education around the new processes and systems for sending goods to Northern Ireland.

Giulia Ní Dhulchaointigh said: “We know from the HMRC survey of businesses that nearly every business here [in Northern Ireland] has heard about the Trader Support Service (TSS) and are registered for it if they need it. In Great Britain, those figures are much lower. There simply is not the awareness that we would like to see there.

“There are a lot of different things in the mix, such as pressures that Great Britain businesses face with trade with the EU, but we definitely feel that there is a need for greater communication to those businesses.”

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