London, UK: Ireland’s food exports and imports could each drop by about a third if the European Union and United Kingdon fail to agree a future trade deal, according to a report from the London School of Economics.
The report, Vulnerabilities of Supply Chains Post-Brexit, predicts Irish food exports will fall by 29.9% and imports will decline by 33.6% in the event there is no trade deal.
The Irish beef market is particularly exposed to a no-deal Brexit, but the dairy industry could also face massive upheaval.
Declines are still expected if a free trade agreement is reached with the report’s authors predicting that Ireland’s food exports will decline by 11.1% and food imports will fall by 12.6% under that scenario.
Researchers at the LSE said Ireland is “likely to be the most negative affected” on disruptions to food trade should no deal be agreed for the end of the transition period in December.
Irish food trade with the UK is most affected based on the fact that 43% of all Irish food exports go to the UK. The country facing the next worst impact on food trade is Cyprus but its decline in food exports are a fraction of Ireland’s at 17 per cent under a no-deal scenario. Spain, the Netherlands, Belgium and Denmark will also be affected but to a lesser extent.
Dairy is one of the areas worst affected under a no-deal scenario with the researchers predicting that dairy exports from the EU to the UK will fall by 18% under a free trade agreement and by 94% under a no-deal scenario.
The report authorss said that modelling the changes on the impact on Irish imports and exports has been made more difficult by “the complexity of the Brexit withdrawal agreement on Northern Ireland given the interconnectedness between Ireland and Northern Ireland”.
The report notes that “this is made more complicated” by UK government policy relating to the withdrawal agreement, a reference to Britain’s Internal Market Bill that paves the way for the withdrawal agreement to be breached on exports between Britain and Northern Ireland.
The researchers warned that the estimates for Ireland should be treated with extra caution. Economist Nikhil Datta, one of the report’s authors, said a large proportion of trade between the Republic and the UK covered in the report was North-South trade on the island of Ireland and that if, in a no-deal scenario, the original withdrawal agreement respected the border being set in the Irish Sea, then the Republic’s trade would not be as badly affected.
“If the Border is between Northern Ireland and the Republic, there will be a large hit. If all the trade is predominantly staying on the island and the Border is on the Irish Sea, then the impact might not be as great,” he said.
