CROSS-BORDER TRADE in goods between Ireland and Northern Ireland has experienced substantial growth since Brexit, according to new research conducted by the Economic and Social Research Institute (ESRI).
In Northern Ireland, 35% of imported goods came from Ireland in 2021 while 53% of its exported goods went south across the border, totaling €2.6 billion and €5.6 billion respectively.
Trade between the North and the rest of the UK was not included when compiling these figures.
Although the proportions of Ireland’s trade in goods with Northern Ireland were smaller in the same year – almost 5% of exports (€160.3) and just over 2% of imports (€99.8 billion) – these are “sizeable shares given the much smaller size of the Northern Ireland economy”, the report stated.
These figures, according to the ESRI report, signify “high levels of trade integration across the border”.
Among the sectors that make up cross-border goods trade between the North and Ireland, chemical and pharmaceutical products as well as food and beverages feature prominently.
“Both Northern Ireland and Ireland have relatively high concentrations of trade in the chemicals and pharmaceuticals sector,” the ESRI report stated.
The breakdown of goods traded across the border shows marked differences when compared to the overall import-export activity of each country individually.
This, the report said, “mainly comes about from a much greater variety of goods being traded cross-border relative to the more specialised patterns of overall trade”.
“The food and beverages sector accounts for a considerably larger share of cross-border trade than it does in the overall trade structure, with 24% of goods going from Ireland to Northern Ireland in this sector, and 27% of goods going from Northern Ireland to Ireland.”
The analysis also presents data on the overall trading patterns of the two countries.
“The next most important export partner for Northern Ireland is Germany, accounting for 15 per cent of total exports” the report read.
The research was funded by the Irish Business and Employers Confederation (Ibec), a business sector lobbying group, as part of a research programme on the all-island economy.
The aim of the programme is to provide insights into the nature of the cross-border economic relationship between Ireland and Northern Ireland, especially for those working in affected industries following the UK’s departure from the EU.
Commenting on the publication of the analysis, Ibec director of lobbying and influence Fergal O’Brien said, “the latest publication on all island trade will provide businesses with invaluable insights on trade and supply chain trends in a post-Brexit context”.
“Business is increasingly aware of the growing opportunities in the all-island economy. The ESRI research demonstrates the pace of this trade growth in recent years and the importance of trade with the EU for Northern Ireland businesses.”
“The research will inform a better understanding of the overall functioning of the all-island economy and also support development of the all-island macroeconomic model which the research programme will ultimately deliver,” he added.
The nature of trade across the border has been the subject of much political debate since the UK voted to leave the EU back in 2016, with many business lobby groups arguing that a “hard Brexit” would have had far-reaching negative consequences for the North’s economy.
The dispute centred around the fact that no hard border exists on the island and therefore arrangements would have to be made when it came to protecting the single market, from the EU perspective, and from the British point of view, keeping trade between Northern Ireland and Britain free from red tape.
After years of arguments and renegotiations between the UK and EU over the form those customs arrangements would take, those fears were finally allayed to some degree when the two sides managed to negotiate what was dubbed the Windsor Framework in February of this year.
The aim of the Windsor Framework is to simplify customs procedures, facilitate parcel post and expand the existing trusted trader scheme for those doing business in the North.
The framework is to be implemented in stages, with the first round of changes – the expansion of the trusted trader scheme – coming into effect on 30 September this year.
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