Trade implications of Irexit


A chara, – Those proposing that Ireland should leave the EU have pointed to Ireland’s low level of exports to non-European markets, and especially so-called “emerging” economies, as representing a major opportunity for exploiting these markets in the event of Irexit.

This viewpoint fails to appreciate that foreign (mainly American) firms account for 90 per cent of Ireland’s exports. Where these send their exports is determined by their global production and marketing strategies.

Foreign firms, for the most part, use Ireland as a base for serving the so-called EMEA (Europe, Middle East, Africa) market, the great bulk of which is accounted for by the EU. In 2016, two-thirds of Ireland’s exports of goods and services went to the EMEA region. The EU accounted for over four fifths of these exports.

For some American firms based in Ireland, the US itself is understandably an important market. Hence, that country accounted for almost one fifth of 2016 exports. This means that the rest of the world absorbed just a sixth of Ireland’s exports in that year.

However, the American firms operating out of Ireland typically have similar operations serving the other major global regions (the Americas and Asia/Oceania) from bases within these regions. Thus, the firms in question have little reason to expand beyond the EMEA market, since to do so would be to compete with their parallel operations elsewhere.

Leaving the EU, therefore, would greatly undermine probably the key reason why American firms locate in Ireland, with little prospect of alternative markets being accessed from Ireland by these firms.

Even after Brexit, the EU will be by far Ireland’s most important export market, and more than twice as important as the UK market. American firms using Ireland to serve both the UK and continental EU markets are likely to continue doing so. – Is mise


Maynooth University,

Co Kildare.