Ireland is a "substantial outlier" among EU states in terms of the exposure on imports to Brexit across almost every sector, according to a new report from the Department of Finance.
The report, published on Wednesday, raises the prospect of sharp increases in costs for Irish importers. It concludes that the exposure on the import of goods is even more pronounced than on exports from the UK’s departure from the EU in March 2019.
The high impact on imports points to the potential disruption to supply chains, particularly for the retail, agri-food and pharmaceutical-chemical sectors.
The report forms part of the Government's preparations and contingency planning around Brexit, and will point to the need for "an ambitious, comprehensive and wide-ranging EU-UK trade agreement to minimise the impact of this structure change to the economy".
In the area of services, the report finds the economy “considerably less exposed to the UK” on imports than exports.
“While Ireland is the second most exposed member state for services exports, it is one of the least exposed for services imports across the majority of services sectors,” the report says. This reflects the State’s heavy reliance on multinationals, with Irish operations providing services internationally.
Last week EU leaders approved guidelines for the next phase of negotiations with the UK on a future trade deal after signing off on a 21-month transition period to avoid a “cliff-edge” Brexit in a year’s time, and to provide a smoother path for traders and businesses coping with the fallout from the change.
The departmental report’s findings will raise awareness among businesses in affected sectors to be mindful of the need to prepare contingency plans, including examining supply chains and drawing down loans.
The Government provided €25 million in funding in this year’s budget for loans targeted at businesses in the farming, fishing and food industries to prepare for Brexit. Food businesses can also access 40 per cent of the funding available under a new €300 million Brexit loan scheme.
Businesses are also being encouraged to seek out new markets for their goods in response to Brexit.