UK and Ireland Trade

For reasons that are probably obvious I recently took a look at the latest figures relating to trade between Ireland and the United Kingdom. These were produced by the UK Government but I’ll nevertheless assume they are trustworthy. The latest complete figures are from 2018; the report was published in January this year (2020).

Here are the key points:

  • In 2018, UK exports to Ireland were worth £35.1 billion; imports from Ireland were £21.6 billion, resulting in a trade surplus of £13.5 billion with Ireland.
  • The UK had a surplus with Ireland in both goods and services.
  • Ireland accounted for 5.5% of UK exports and 3.2% of all UK imports.
  • Ireland was the UK’s 5th largest export market and the 10th largest source of imports.
  • The UK has recorded a trade surplus with Ireland every year between 1999 and 2018.

Brexiter logic states that the fact that the EU exports more to the UK than vice 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 accounts for a small fraction of goods exports from Ireland.

As the United Kingdom has left the European Union it must now try to negotiate new trading arrangements that will cover trade with remaining member states, including Ireland. No doubt the EU negotiators will be pressed by Ireland to take steps to reduce the imbalance described above. As the UK no longer wants to avail itself of the benefits of Single Market, it seems likely that other EU member states will want to seize the opportunity to boost their trade by filling the gaps.

Since the UK’s trading agreement with the EU (if there ever is one, which is doubtful) will probably not include services, I thought it would be interesting to look at goods: here is a summary of the breakdown of this category of UK exports to Ireland:

`Miscellaneous manufactured articles’, incidentally, means things made out of plastic, etc.

As a relatively recent arrival in Ireland I find these figures quite interesting in light of my own experience of shopping here. I know that consumer goods aren’t representative of all trade so this is just a comment on my own impressions and is not to be taken too seriously.

If you go into a Supermarket in Ireland you will find that fresh vegetables, meat and dairy products are generally all from local sources. There is a wide choice of these items and value for money is generally very good. The same is true for bread and bread-related products. Some fruit is imported from the EU (especially France and The Netherlands, but including some, e.g. apples, from the UK) and some from further afield (e.g. bananas from the Caribbean and Latin America). You will be shocked to learn that bendy bananas are freely available.

Moving to processed foods (including confectionery, canned items, etc) the picture changes quite a bit. There are local Irish brands but they tend to be alongside familiar British ones. There are also items from elsewhere, e.g. from Italy, that I have never seen on sale in the UK. The (smaller) Irish brands of, say, marmalade seem to be a bit dearer than their imported equivalent but are often of better quality.

As an aside I’ll also mention that supermarkets here have a noticeably smaller range of convenience foods (e.g. microwave meals and ready-made sandwiches) than in corresponding outlets in the UK.

I’ve been impressed at the quality and availability of another important staple, wine. There is a better range of French, Spanish and Italian wines in Supervalu in Ireland, especially at the quality end of the spectrum, than in stores of a similar size in the United Kingdom. There is also a good range of wines from Australia, New Zealand, South Africa and Latin America. I haven’t tried Irish wine yet…

In summary, then, it’s perfectly easy to eat and drink well in Ireland without buying any British products. For myself, I have always tried to buy local food products whenever possible to support the Irish economy as best I can.

Elsewhere in the store however you can see a much greater dominance of UK products. This is particularly true of toiletries (including toothpaste, shampoo), pharmaceutical goods, domestic cleaning products and so on. These tend to be dominated by familiar British brands, although they seem to be more expensive here in Ireland than in the UK.

None of the goods mentioned in the previous paragraph are at all perishable so they could in principle be quite easily be imported from further afield. I wonder if we’ll soon start seeing products of this sort starting to appear from elsewhere?

13 Responses to “UK and Ireland Trade”

  1. Bryn Jones Says:

    Coincidentally, I returned half an hour ago from shopping in a German-owned supermarket 50 metres from the entrance to Holyhead port.

    Things could change substantially at that port over the coming year. It could be a lot quieter.

  2. Tom Shanks Says:

    But in terms of greenhouse gas production per head of population, isn’t it true that Ireland is one of the worst due to food production methods plus peat burning?

    • telescoper Says:

      Not directly relevant to the post, but true. Ireland is the third worst per capita in the EU and a big component of that is agriculture.

  3. Dave Carter Says:

    Brexiter logic is flawed as usual. The fact that The EU exports more to the UK than the UK does to the EU means that we need their stuff more than they need ours. It is a flaw in the way that politicians talk about trade that they do not appreciate the value of imports to the population. Even the phrase “trade deficit” is false, trade is an exchange, of money for products, of nominally equal value so it produces neither a deficit nor a surplus.

    Certainly one of the things that worries me most is the prospect of reduced access to quality food products, such as cured meats, cheese, wine, yoghurts (the best ones come from Ireland) that we all get from our favourite German-owned supermarkets.

    • telescoper Says:

      I didn’t mention yoghurts. The selection available here is huge!

      • Dave Carter Says:

        There is a particular range, produced in West Cork, available in my favourite German-owned supermarket (in the UK). They are absolutely excellent.

    • Dave Carter Says:

      Trump seems to think that producing quality and good value products is in itself unfair competition. Whereas he should see it as a wake up call to his domestic producers.

  4. Dave Carter Says:

    The point about imports from elsewhere is a difficult one, I would say no, because if the UK does not sign up to regulatory alignment th=en there is no guarantee that those products are produced to EY+U food safety standards. So if the UK is outside of the singe market, without regulatory alignment, it becomes more important to source EU produced products.

  5. Dave Carter Says:

    And an even more general point is that when politicians talk about trade, they do so solely from the point of view of the producer, and the consumer is forgotten.

  6. The point about the persective is a good one. Unless the producer has a monopoly (Microsoft, Google,…) then the buyer has a choice and will do a trade-off of performance/quality/price, plus the more intangible things such as (in a B2B context) documentation needs and assurance of post-delivery support. So, what does the UK produce that has no competing supplier inside the EU?

  7. Dave Carter Says:

    Scotch Whisky obviously, though there is some competition from Irish Whiskey (I would have thought that most of this is produced in the EU, Bushmills being the exception). But I think that most of the products which are unique to the UK are in the services sector. Particularly financial services, until they relocate.

  8. Hamish Johnston Says:

    Sounds like you might be interested in a research field trip to the Sainsbury’s at the Quays shopping centre in Newry (or the giant Tesco on Downshire Rd). Here you can observe crowds of folks from south-of-the-border stocking-up on on things that are much cheaper in NI than in the Republic.

    • telescoper Says:

      Perhaps so. Probably the things I mentioned in the post. Prices in supermarkets vary all across the UK too; they are probably much lower in NI than they are in, e.g., SE England. There’s also the currently low value of the pound relative to the euro.

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