06 Mar 2018 | 12.33 pm
InterTradeIreland Report Probes Cross-Border Trade
‘Deep linkages’ reveal potential impact of Brexit
06 Mar 2018 | 12.33 pm
InterTradeIreland has published a report on cross-border trade which shows that 51% of Irish exporters send more than half of their exports to Northern Ireland. In the case of half of that cohort Northern Ireland is the destination for more than 95% of their exports, underlining the importance of getting the terms right for the UK’s exit from the EU.
Among the report’s key findings are:
- Northern Ireland accounts for between 10% and 12% of total exports from Ireland to the UK as a whole and accounted for 7% to 8% of imports. Given that the population of Northern Ireland makes up less than 3% of the UK total, this shows the closeness of the economic ties between the two jurisdictions.
- A very signiﬁcant share of cross-border trade is accounted for by ﬁrms that trade simultaneously in both directions. These two-way traders make up around 18% of ﬁrms but accounted for over 60% of exports and over 70% of imports.
- A high level of ongoing product turnover among trading ﬁrms, which regularly introduce new products to the market, with many goods traded for one year only. This pattern is consistent across ﬁrm of all sizes and between food and non-food ﬁrms, and shows a high degree of innovation among cross-border traders.
Business minister Heather Humphreys welcomed the report, and said: “What emerges clearly from this research is the high degree of integration of the economies north and south. It illustrates that the cross-border market is dominated by SMEs, and that the ability to transport products, source components and sell services across the border in a seamless way is essential to thousands of business models.
“Even if firms don’t sell directly to the UK, there is a strong likelihood that they buy products from that market and, if they do, they will be affected by Brexit. All companies should ask themselves key questions about their supply chain, and get started by accessing up to €2,000 in funding and support from InterTradeIreland.”
Companies that trade across the border are more likely to introduce new goods and services, with 35% introducing products for just one year.
InterTradeIreland director Aidan Gough said: “This report shows the disproportionate importance of cross-border trade for businesses across the island. The high degree of interconnectedness of supply chains, which the report points to, also increases exposure to a so-called hard Brexit.
“We are recommending to firms which benefit from cross-border trade, or source components, goods or services from the UK, that they focus less on the significant noise and debate in the media about the ongoing negotiations, and focus more on planning for a new trading relationship, with our support if needed.”
Photo: Ken Nelson (left), InterTradeIreland chairman, with Minister Humphreys and Aidan Gough