Key Intertrade report on cross-border tariffs (1)

The Brexit debate has been long on rhetoric and posturing, but deplorably short on facts and verifiable research. In Ireland the key publication to date has been Working Paper 550, issued in November 2016 from the Economic and Social Research Council (ESRI) which attempted to quantify likely Brexit impact on the Irish economy, sector by sector. We now have a welcome addition in the form of  “Potential Impact of WTO Tariffs on Cross-Border Trade” from Intertrade Ireland, one of six cross-border bodies set up under the Good Friday.

We knew from the ESRI report that agri-food was going to get it in the neck, and subsequent work from Bord Bia and others showed that the dairy industry was first in line: the hard Brexit which we are now almost certain to get is an effective death sentence on cheddar cheese exports. A particular complication, which came to light in our own Frontline interviews in January and has since been reinforced by other research, is the way that food products in general and milk in particular – more than a billion litres a year – move back and forth across the border. In fact, this is a much wider complication of Brexit:

“Businesses across the island of Ireland are currently highly integrated with products potentially crossing the border multiple times during different stages of processing.”

This is a major part of the puzzle which Intertrade researchers, working with the ESRI and other agencies in its cross-border steering group, have tried to tease out and most importantly, to quantify.

The first fact to establish is that cross-border trade is not just a representative sub-sample of Anglo-Irish trade. Ireland’s multinational chemical and pharmaceutical producers, for example, account for 20.5% of exports to the UK but just 2.6% of exports to the north. We know from our Frontline project and our other coverage that with a few exceptions, cross-border trade is dominated by SMEs which could not easily find alternative markets. There is a political lesson to be drawn here, which of course the report makes no attempt to do: the problems of our cross-border businesses are unlikely to be the top priority for Dublin or Brussels or more particularly, for London. They will all have much bigger fish to fry.

(More to follow)