Brexit cut trade between UK and EU by nearly 20%

Goods to Ireland hit with particular 'substantial negative impact' says Economic and Social Research Institute

Trade from the UK to the EU dropped 16 per cent while there was a 20 per cent decline in trade from the EU to the UK, compared to a no-Brexit scenario. EPA

Brexit caused a drop of almost a fifth in trade between the European Union and the UK, with goods to Ireland particularly hit, research has found.

It resulted in a “substantial negative impact” for trade in both directions, according to Ireland’s Economic and Social Research Institute.

Trade from the UK to the EU dropped 16 per cent while there was a 20 per cent decline in trade from the EU to the UK, compared to a no-Brexit scenario, the ESRI said in a working paper published on Wednesday. The analysis looked at product-level data on goods trade flows for 2021 — the first full year of the UK’s withdrawal from the bloc.

“Across EU member states, we find that Brexit has led to a significant decline in trade with the UK in almost all cases although by varying magnitudes,” authors Janez Kren and Martina Lawless wrote.

“Although goods trade between the EU and UK recovered most of its previous level in value terms following the sharp fall in the early months of 2021, this recovery leaves it well below the levels that would have been expected if it had performed on a comparable level with other trade partners.”

For most countries the drop in imports and exports was similar, though Ireland stands out has having had a particularly large decline in imports from the UK, they said.

Meanwhile, there has been “no notable impact to date” on exports from Ireland to the UK. This may be partly attributable to increased trade between Ireland and Northern Ireland, they added.

A lorry leaves Larne port, north of Belfast in Northern Ireland, after arriving on a ferry. AFP

The research used a premise for comparison that trade with the UK should have been expected to grow at a similar pace to trade with other EU partner countries around the world.

Although EU-UK trade recovered in value terms after a fall in early 2021, it is “well below” what would have been expected if it had performed on a comparable level with other trade partners, the report said.

A poll carried out for The National in September showed concern among Britons about the impact of Brexit. Questioned on Brexit, 52 per cent of the public agreed it was a bad thing that Britain had left the EU and, by a margin of 46 per cent to 19 per cent, that the process had gone badly.

On Tuesday, Northern Ireland Secretary Chris Heaton-Harris restated his intention to call a Stormont Assembly if the executive is not reformed by October 28.

Devolved government in the region has been in flux throughout the year, and current legislation requires Mr Heaton-Harris to call a fresh election if an executive is not formed by the deadline.

Resolving the issues surrounding the Northern Ireland protocol remains in UK Prime Minister Liz Truss's in-tray, which has been overshadowed by the tumbling economy.

A poll carried out for The National showed 52 per cent of Britons agreed Brexit was a bad thing. Getty

Ms Truss told Tory MPs of the Brexit-supporting European Research Group (ERG) on Tuesday that she stood by the legislation on the Northern Ireland Protocol.

ERG chairman Mark Francois said after the meeting: “She was absolutely committed to see a robust outcome regarding the Northern Ireland Protocol.

“Very, very clear about that. Remember that she, when she was foreign secretary, was involved in toughening up that legislation.”

Mr Francois said the meeting had been “positive”.

“She was open. She answered every question that she was asked directly,” he said. “And as you will know, colleagues in the ERG aren’t necessarily hesitant about asking questions. And so she was very clear in the answers that she gave.”