Brexit and our shifting balance of trade – The Irish Times

One year into Brexit, is it reasonable to speculate whether the disrupted trade in goods coming from Britain (imports are down by one-fifth) have been replaced by imports from the North?

The latest trade numbers from the Central Statistics Office (CSO) show the value of imports from Britain fell by 3.3 billion or 21 per cent to 12.5 billion in the first 11 months of last year. The chief driver of this was a 39 per cent (1.06 billion) drop in food imports. This reflects what big UK grocers like Marks and Spencer (M&S) say is the administrive burden of bringing goods here post-Brexit. The retailer cut about 800 lines from its shops in the Republic last year, roughly 20 per cent of its total range of goods here.

Coinciding with this fall in British imports has been a surge in goods coming from the North. They jumped by 64 per cent (or 1.4 billion) to 3.7 billion over the same 11-month period. The latter is, however, more dispersed across sectors, driven by increased imports of food and live animals (plus 285 million or 44 per cent), increased imports of chemicals and related products (up 558 million or 203 per cent), and increased imports of mineral fuels and related products (up 167 million or 115 per cent).

So we can say an element of the Brexit-disrupted trade coming from Britain is being replaced by increased imports from the North, but crucially not all of it. Anecdotally, we know some British companies have set up hubs in the North to handle goods from Britain and send them on to the Republic. It may also be the case that some importers in the Republic may have replaced goods formerly imported from Britain with goods imported from other EU countries, where the bureaucracy isnt as burdensome. The CSO is currently looking into this to see if it can identify what sectors and products it might apply to. Irish exports to Britain also remain at risk from additional Brexit customs checks on the British side. These were due to come in at the start of the year but were deferred until June.

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Brexit and our shifting balance of trade - The Irish Times