Fact check: As Brexit looms, how dependent is Ireland on British trade?

A recent interview on BBC radio between Helen McEntee, the Irish minister for Europe, and John Humphrys, the veteran presenter, provided a stinging insight into why frustration over Brexit is gradually turning to anger in Dublin.

After probing McEntee on the Irish government’s attitude to the question of the border between Ireland and Northern Ireland, he moved on to the overall Irish-British relationship.

“Britain is hugely important to your economy obviously,” he said. “It accounts for 50 percent of exports from the Republic.

“Therefore, there has to be an argument, doesn’t there, that says, instead of Dublin telling this country that we have to stay within the single market, within the customs union, why doesn’t the Republic of Ireland leave the European Union and throw their lot in with this country?”

When word of the interview made its way across the Irish Sea, there was anger and shock. Asking politicians of sovereign nations why they don’t return to colony status under former rulers generally doesn’t go down well.

Yet more interesting than Humphrys’ curious grasp of history was his even more curious grasp of economics. He grossly exaggerated the volume of Irish exports to the UK, something which McEntee instantly corrected him on.

But the premise of his question has been a prominent narrative within the internal British debate on Brexit. The Irish are so economically dependent on the UK, the theory goes, that they will ultimately have to drop their demands on the border, because a no-deal Brexit would be worse for them than even the UK.

A changing relationship

Does that stand up to scrutiny? First of all, Humphrys’ claim that Britain accounts for 50 percent of exports from Ireland was grievously wrong. In 2016, the UK market accounted for 11 percent of Irish exports. In 2017, the figure was 12 percent. While these represent significant trade volumes, it is a long way off 50 percent.

Could Humphrys’ wildly optimistic figure have included services, as well as goods? According to the Irish Central Statistics Office (CSO), the UK accounted for 16.4 percent of Irish exports in services in 2017. So no, he was simply wrong.

In the above tweet from Irish Taoiseach Leo Varadkar, sent the day after the Brexit vote in June 2016, the years chosen are all economically significant. The last two are particularly so: 1979 was the year when the link between the Irish punt and the British pound was broken, while 2002 was the year Ireland joined the euro and the UK chose to stick with sterling.

In 2002, Ireland’s exports were far more tilted toward Britain than they are today. According to figures provided to DW by the CSO, 23.9 percent of Irish exports that year went to Britain, in contrast to around 40 percent to the rest of the EU and around 16 percent to the US.

The deepening integration of the eurozone area has helped change this dynamic. CSO figures for 2018 (up until the end of November) show that last year, 11 percent of Irish exports went to the UK, worth around €14.6 billion.

That is drastically less than the 28.5 percent (€36.4 billion) that went to the US — a strand which has grown dramatically — and the 39 percent (€49.7 billion) that went to EU nations other than the UK.

Food for thoughtlessness

While the markets for Irish exports have diversified significantly over the last two decades, in some sectors the reliance on the British market is profound.

One sector that is regularly mentioned is food and drink. In 2016 for example, 49 percent of all Irish beef was exported to the UK. In terms of dairy products, in 2016, 82 percent of Irish milk went to Britain. That helps to explain why the agriculture industry, both north and south of the Irish border, has been so vocal about the damage Brexit will cause to their sector.

As well as key export areas, there is also the issue of imports. Britain imports more than any other individual country into Ireland. In 2017, Britain accounted for 24 percent of Irish imports. The EU as a whole (excluding Britain) accounted for around 40 percent of imports.

Priti Patel, a British Conservative party member who previously served as International Development Secretary, suggested recently that the threat of food shortages in Ireland in the event of a no-deal Brexit should be leveraged to provoke Dublin into making concessions.

This was widely condemned in Ireland, where the Great Famine of the 1840s is a deeply embedded folk memory. The Irish government was quick to point out that Ireland is a net exporter of food, and in 2017 was identified by the Economist Intelligence Unit as the world’s most food-secure nation.

Nonetheless, a no-deal Brexit would cause significant issues within Ireland in terms of imports for a wide variety of sectors which would have to quickly find alternatives to the €19 billion worth of goods they import annually.

Land bridge over troubled water

Arguably the biggest issue of all for Ireland in terms of post-Brexit trade relates to logistics, and the critical importance of the British land bridge as a route to continental Europe for Irish exports.

Sending exports from Dublin to British ports, and then from there to the Dover-Calais crossing, has helped many Irish exporters reach their continental European marketplaces quicker than any other route.

Any logistical impediments to this route after Brexit, such as multiple delays caused by custom checks or increased costs, could prove very damaging for Irish food exporters trying to reach European markets quickly. While attempts are being made to limit the importance of the land bridge (for example, sea connections between Dublin-Rotterdam and Dublin-Zeebrugge are being strengthened at present), the statistics regarding roll-on, roll-off ferries leaving Dublin tell the tale.

Roll-on, roll-off ferries refer to those with lorries and trucks carrying containers, important for products that need to get quickly to market, such as perishable food. According to the CSO, in 2017, of the 553,630 roll-on, roll-off freight containers that left Irish ports, almost all of them were headed for other EU destinations, and 85 percent of Ireland’s EU freight trade goes via British ports, around 475,000 containers.

So while Britain is evidently a very important trade market for Ireland, its significance has declined over the years as Ireland’s overall EU integration has deepened.

However, the area where Ireland really needs some kind of plan B is the transport of goods via the UK land bridge.

Article source: https://www.dw.com/en/fact-check-as-brexit-looms-how-dependent-is-ireland-on-british-trade/a-47322998?maca=en-rss-en-all-1573-rdf