Brexit and pandemic combine for big hit to Irish trade with Britain
Latest data shows surge in trade between North and Republic
The CSO said the value of goods imports from Britain fell by 57 per cent or €1.6 billion during the first two months of 2021 when compared with the same period last year.
Brexit and the pandemic have damaged the Republic’s trading relationship with Britain with the latest trade numbers showing a major fall-off in exports and imports. The latest figures also point however to a surge in trade between the Republic and the North.
According to the Central Statistics Office (CSO), the value of goods imports from Britain fell by 57 per cent or €1.6 billion during the first two months of 2021 compared with the same period last year, while exports declined by 12 per cent or €250 million.
The largest decreases were in the imports of food and live animals, mineral fuels, and machinery and transport equipment while the weaker exports was driven by a fall-off in food exports.
The reduction in trade is being attributed to a combination of factors, including the challenges of complying with customs requirements.
The stockpiling of goods in the final quarter of 2020 in preparation for Brexit, the substitution with goods from other countries and a reduction in trade volumes due to Covid-19 were also cited as possible reasons.
Meanwhile, the figures show a sizeable pick-up in trade between the Republic and Northern Ireland, suggesting more firms appear to be using the North as a channel to move goods between the Republic and Britain since Brexit.
Imports from Northern Ireland into the Republic almost doubled to €283 million in February compared with the same month last year – half of the increase related to pharma – while the value of exports from the Republic to Northern Ireland rose by 38 per cent to €232 million.
The overall figures for February pointed to another strong month for Irish exports, which rose marginally to €13.1 billion on the back of strong pharma exports.
Exports of medical and pharmaceutical products in February were valued at €4.5 million, up 35 per cent on the same month last year.
The Republic’s pharma sector has benefited from a strong pick-up in demand linked to the pandemic.
The value of goods imports fell slightly to €6.9 billion, which gave rise to a seasonally adjusted trade surplus of €6.2 billion.
The EU accounted for €4.6 billion (38 per cent ) of total exports in February, of which €1.4 billion went to Germany and €1 billion went to Belgium. The figures show exports to EU countries in February decreased by 1 per cent compared with February last year.
The US was the main non-EU destination accounting for €4.3 billion (35 per cent) of exports in February.
“While today’s CSO figures for imports from Britain for February 2021 are 53 per cent behind February 2020, there is optimism that the following months can produce more encouraging results as a number of early administrative issues, customs paperwork and unforeseen delays with shipments are reducing as businesses adjust to the changed trading landscape post Brexit,” Janette Maxwell, director in indirect tax at Grant Thornton Ireland, said.
Noting the overall value of Irish exports rose, she said: “Brexit is still in its infancy but these figures are perhaps an indication that Irish businesses are finding new markets for their products.”