Post-Brexit trade bill could cost us €100m each week
BARRIERS to trade as a result of Brexit, like import-export delays and additional red tape, could cost nearly €100m a week, new research from the Central Bank suggests.
That doesn’t include a worst case scenario of financial tariffs being charged as goods and services are traded across the Border. The research by Stephen Byrne and Jonathan Rice assessed the potential impact of non-tariff barriers – such as delays resulting from additional documentary compliance and customs procedures.
It found potential delays could result in an estimated 9.6pc decline in overall trade (imports and exports) between the UK and Ireland.
The Department of Foreign Affairs says the value of two-way trade between the two countries is €1bn a week. Knocking a tenth off that would amount to roughly €100m.
The Central Bank team thinks the largest declines would be suffered by Irish exporters of perishable fresh foods as well as machinery and transport equipment, and manufacturing materials. Some of the same sectors, along with transport equipment, would be worst hit in terms of imports to Ireland from the UK.
Sectors like fuels, non-perishable foods, and chemicals, would be largely unaffected.
While there would be scope for Ireland to find new export markets and new sources, the research team noted factors that drive Irish-UK trade such as the common language, legal system and similar preferences may make this difficult for certain products and sectors.
The Central Bank’s official view is that Brexit poses far greater risks to the Irish economy than it throws up opportunities.
“It’s clear from today’s research that the potential effect of Britain’s decision to leave the EU would be negative and significant for Irish-UK trade, with trade in raw materials, beverages and fresh foods most vulnerable to customs delays.
“This highlights the vital importance of negotiations on future arrangements for trade,” said Mark Cassidy, the Central Bank’s director of Economics and Statistics.
“Whilst the research focuses on a pessimistic scenario, it is vital that we understand and flag the risks to trade. The potential effect of tariffs following the UK’s departure from the customs union is well documented, but the impact of non-tariff barriers has received less attention.”