The Myths of UK-Ireland Trade

It is clear now that the UK Government’s strategy on Brexit is one of economic aggression towards Ireland.  Senior Brexiters seem to think that threatening to put up barriers to trade with the Republic will frighten it and the European Union into abandoning the rules of the single market and customs union.

As well as being morally repellent this strategy is also extremely stupid, as is based on a complete misconception of the state of trade between these two countries. For example, one prominent Leave campaigner and former Minister of State recently claimed that 90% of Ireland’s trade is with the UK. That may have been the case in the 1950s but it is certainly not the case now.

In fact, according to the latest figures, only about 11% of Ireland’s exports in goods go to the UK and this figure is falling rapidly. The largest export destination for Ireland within the EU is actually not the UK, but Belgium (11.65%) with Germany just behind on 8.56%. Overall the EU accounts for about 49% of Ireland’s exports; the largest other contribution is the United States on about 29%.

Contrary to popular myth, Ireland’s exports are not dominated by agriculture and food. By far the largest contribution is from chemicals and pharmaceutical products many of which go to Antwerp for onward distribution and/or further processing. This accounts for the large trade figure with Belgium.

Another fact worth mentioning is that while Ireland overall has a healthy trade surplus overall (it exports more than it imports; see above Figure), its trade balance with the United Kingdom is actually negative (i.e. the UK exports more to Ireland than it imports). In 2018, UK exports to Ireland were worth £38.3 billion; imports from Ireland were £21.9 billion, resulting in a trade surplus of £16.4 billion with Ireland. Ireland accounted for 6.0% of UK exports and 3.3% of all UK imports. Ireland was the UK’s 5th largest export market and the 9th largest source of imports. The UK has recorded a trade surplus with Ireland every year between 1999 and 2018.

Brexiters have frequently used the argument that, since the UK has a negative trade balance with the EU, the EU needs the UK more than the UK needs the EU. It’s a wrong argument, of course, but it’s interesting that the Brexiters don’t apply it to Ireland.

There’s no question that the `No Deal’ Brexit which I’ve regarded as inevitable from the outset will disrupt the Irish economy, or at least parts of it, and in the short term, but I agree with the Irish Times analysis from some time ago and a more recent article from the FT that it will cause far greater damage to the UK.

In the longer term, when the UK is out of the European Union I’m sure its trade surplus with Ireland will quickly disappear as Ireland finds alternative (and more trustworthy) trading partners. Irish businesses are already eliminating British companies out of their supply chains and it seems likely that if and when the hard Brexit arrives, Irish customers will be increasingly disinclined to buy British products.

The UK seems to be hoping that some sort of deal with Trump’s America will help it out of the economic hole it has dug for itself, but remember that the UK currently has a trade surplus with the USA. The Americans will be keen to eliminate that during any future trade negotiations.

The really important thing however is not the overall effect on the economy but on the problems it will cause for communities either side of the British border in Ireland. The recently-leaked documents from Operation Yellowhammer make it clear that the UK government `expects a return to a hard border in Ireland’. The implication of this is stark: the UK government is planning to renege on its obligations under the Good Friday Agreement, which is an international treaty.

If it goes ahead and does that, then it may be that the economic effects of leaving the single market and customs union are small potatoes compared to the price that will pay for becoming a rogue state. I can’t see the United States, with its approximately 40 million citizens of Irish descent, being keen to support a British government that is so obviously seeking to bully Ireland especially, as seems sadly likely, British actions spark a return to violence in the North.

22 Responses to “The Myths of UK-Ireland Trade”

  1. Politicians and other figures on both sides of the border have stressed many times that there will be no justification for any return to violence. So to say that British actions are likely to spark a return to violence comes across as blaming the UK if it happens. The responsibility for such actions rests fully with those that undertake them.

    • telescoper Says:

      It’s interesting that politicians took credit for bringing peace to Northern Ireland via the Good Friday Agreement, but refuse to take any responsibility for what might happen if and when they violate that agreement.

      • Most of the participants in the GFA negotiations would not have accepted the argument that a failure to negotiate an agreement would have justified a return to violence, as there was never a justification for the violence. Similarly to say that if the GFA is terminated then its partly the responsibility of those not engaging in the violence is simply wrong.

      • telescoper Says:

        Measles is bad, but it can be prevented by vaccination.

        If you don’t vaccinate your kids and they get measles, don’t you think you have some responsibility?

      • A better analogy would be:

        A group of people are deliberately giving people measles. They have no mandate for their actions. You can immunise against it. However, if you don’t immunise against it, its your fault if they give you measles.

      • telescoper Says:

        I’d ask in this case why you would not immunize against it, at least until you could deal with the people responsible.

  2. telescoper Says:

    Exactly: “Let’s take control of our borders” was the mantra, which means taking control of the border in Ireland.

    I don’t understand the mentality behind the violence in both Ireland and on mainland Britain until the Good Friday Agreement nor do I in any way condone it, but that doesn’t mean that it didn’t happen and that it won’t resume.

    • It may resume, but a hard Brexit is no excuse.

      The ‘hard border’ as such didn’t exist before the ‘troubles’. It was a result of the troubles, not because of immigration fears or transfer of goods.

      There was of course no consideration of the border in the No Campaign, as indeed there was no consideration of many things. When they speak about ‘taking back control of borders’ they mean England, and would be very happy to see the breakup of the UK if it delivered Brexit.

      The best solution would be the ‘backstop down the Irish sea’, which would be very good economically for N Ireland.

      • telescoper Says:

        Unfortunately your `best solution’ seems to have been rejected by the DUP (on whose support the UK Government depends). Of course others have different ideas about what might be the best solution.

      • telescoper Says:

        It depends precisely what you mean by a “hard border”, but there was what I would call a hard border from the declaration of the Irish Republic in 1949, including customs checks, passport control and duties. By the 1950s the symbolism of the border as a legacy of British imperialism led to the `Border Campaign’ by the IRA. It’s true that it wasn’t until the Troubles that the British border became a heavily fortified barrier, but before that it was what it was very far from allowing the free movement of goods and people that current arrangements allow.

    • telescoper Says:

      Scottish independence is a possibility, but I don’t see any logic in forming a new country with Ireland.

      In my opinion the perfect size for a country in terms of population is about 5 or 6 million. I think the EU would work much better if the larger member states were broken up into pieces of about that size.

    • Sorry your comment about a hard border after 1949 is simply wrong. No passport control – no-one in my family had a passport and we travelled to and from Dublin frequently.

      My final comment on this issue. Many people on this and other blogs comment on ‘the Troubles’. Unless you actually lived through it – and I mean lived in an area of N Ireland directly impacted by it – you really don’t know the topic at all.

      • telescoper Says:

        My mistake – passport checks were between Great Britain and Ireland not between Ireland and Northern Ireland, and they were suspended in 1952.

        I should hardly need to mention that the impact of the `Troubles’ extended far beyond those living in Northern Ireland. There were several IRA bombs in London when I lived there, two of them very close to me, as well as other terrorist atrocities around Britain. A different experience , on a different level, from living in Northern Ireland, of course, but not no experience at all.

    • Said it was my last comment, but…

      You mention several bombs in London which compares to more than 10,000 in N Ireland. You also I suspect didn’t have gun battles outside your house as a regular occurrence. Or rubber bullets fired at you. Or guns shoved in your face by the IRA and British Army (at different times). Or a whole range of other things. So, I would argue that the experience outside N Ireland was very very minor – apart from those of course impacted by the bombing in Britain.

      Absolutely last comment this time.

    • Anton Garrett Says:

      In my opinion the perfect size for a country in terms of population is about 5 or 6 million. I think the EU would work much better if the larger member states were broken up into pieces of about that size.

      That’s effectively a modern version of the Holy Roman Empire – which was, of course, neither Holy nor Roman (it was Germanic) nor an Empire.

      I can see what you are getting at – small is beautiful – but the notion of a nation has some rather more natural delineations than a semi-arbitrary number. In particular, geography (seas, large rivers, deserts and mountain ranges make natural borders) and shared culture (defined above all by language).

  3. Chris Chaloner Says:

    The 5-or-6-million country size fits with the old plan for a “Europe of the Regions”.
    The UK+Ireland Common Travel Area predates Schengen and freedom of movement in the EU, so it used to be much simpler for people to move across the Irish Sea than in either direction across the Channel. The free movement of goods just made everything simpler and stopped smuggling across the border.
    I see from the dozens of DEXEU emails that I get every day that trade with the Channel Islands will be more complicated after Brexit too, even though they are not technically in the EU. However, I’ve had detailed information on how to do trade with Peru. I haven’t yet done anything about an International Driving Permit so that I can drive rental cars in Netherlands…

  4. Nigel Foot Says:

    I am totally embarrassed at the appalling behaviour of this odious Johnson Government. Most of all, I am embarrassed at their treatment of everyone on the island of Ireland. Britain (perhaps one should say England) has been responsible for reprehensible behaviour towards the Irish for centuries and it is heartbreaking to see the recent excellent relations built up with the Republic, trashed.

    • telescoper Says:

      I’m all in favour of a United Ireland, but it will only happen if there’s a majority on both sides of the border in favour of it.

  5. […] Brexiter logic states that the fact that the EU exports more to the UK than versa means that the EU needs the UK more than the UK needs the EU. Applying the same argument to Ireland would imply that the UK needs Ireland more than Ireland needs the UK (if it were correct). The reality is that membership of the single market has been of benefit to the economy of both countries (and the rest of the EU). Trade is not a zero-sum game. While the Single Market has allowed the UK to generate a trading surplus with Ireland, Ireland has found other opportunities elsewhere to more than make up. Contrary to popular myth, the UK now only amounts for a small fraction of goods exports from Ireland. […]

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