Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.
Trade Policy Insights: The Irish Backstop and Trade – What and how much?
22 February 2019
Author: Daniela Stratulativ, Head of Global Trade
Analysis, IHS Markit Maritime & Trade
Key Points:
The backstop means there would be a single EU-UK customs
territory. There would be no tariffs, quotas, or rules of origin
checks between the EU and the UK. If the backstop solution is not
applied, it means the UK, including Northern Ireland, will trade
under the World Trade Organization rules.
Ireland is the 5th largest export market for the UK
by value. In 2018, UK exports to Ireland reached 28 bn USD,
representing 6% of total UK exports of 492 bn USD. Ireland is the
UK's 10th import partner by value. In 2018, imports from
Ireland reached close to 19 bn USD, a share of 3% of the total UK
imports of 651 bn USD.
The UK (not including Northern Ireland) is Ireland's largest
supplier at 22 bn USD. Northern Ireland is the 9th
largest supplier for Ireland at 1.7 bn USD.
Ireland's exports to the UK (not including Northern Ireland) by
volume reached close to 7 million tonnes in 2018. The volume of
imports from the UK (not including Northern Ireland) was close to
14 million tonnes.
Ireland's exports to Northern Ireland in 2018 reached 2.3 bn
USD and 3 million tonnes. The highest volumes traded were
plastering materials and wood.
In 2018, Ireland's main imports from Northern Ireland by volume
were plastering materials, dairy, and mineral fuels, followed by
animal feed and cereals. Total volume was 3.7 million tonnes.
The backstop, the UK, and the EU Customs
Union
The backstop solution would ensure Ireland's border with
Northern Ireland remains open. In November last year, the European
Commission stated that the EU and the UK have committed that they
will use their best endeavours to conclude and ratify an agreement
by 1 July 2020 which would replace the backstop. Earlier on
Wednesday, February 20, 2019, European Commission President
Jean-Claude Juncker and British Prime Minister Theresa May said
that the backstop provision is temporary.
What the backstop means: there will be a single EU-UK customs
territory. There will be no tariffs, quotas, or rules of origin
checks between the EU and the UK.
If the backstop solution is not implemented, what does it mean
for trade? All goods imported into the UK from Ireland and the
other EU states will be subject to the World Trade Organization
(WTO) rules on tariffs, quotas, and rules of origin. There would be
customs checks and new administrative procedures. These can cause
delays at the border, given the high volumes of trade.
What are the main products and volumes traded between Ireland
and Northern Ireland, and Ireland and the UK (not including
Northern Ireland)? Where does Ireland rank among the UK's trade
partners? How important trade with Northern Ireland and the UK is
for Ireland?
UK (including Northern Ireland) Trade - Ireland ranking
among partners
Ireland is the 5th largest export market for the UK.
In 2018, UK exports to Ireland reached 28 bn USD, representing 6%
of total UK exports of 492 bn USD. The top partners were the United
States with a 14% share, Germany 10%, Netherlands and France 7%
each. The UK exports to China also reached 28 bn USD, close to the
value of exports to Ireland. The next major market after China is
Switzerland at 26 bn USD.
The highest increases in UK exports were to China at 32%
compared to the previous year, Switzerland 30%, Netherlands 22%,
Ireland 13%, and the United States 11%.
Ireland is the UK's 10th import partner by value. In
2018, imports from Ireland reached close to 19 bn USD, a share of
3% of the total UK imports of 651 bn USD. The UK's main import
partner is Germany with a 14% share of total UK imports in 2018.
Following are the United States with a 10% share, Netherlands 9%,
China 8%, France 6%, Belgium 5%, Italy and Norway 4% each, and
Spain over 3%.
The highest increases in UK imports by value in 2018 were for
products from Norway 10%, Belgium 9%, Netherlands 8%; imports from
Germany increased at 3%, while imports from Ireland registered a 1%
increase compared to the previous year.
Ireland Trade - UK (not including Northern Ireland) and
Northern Ireland ranking among partners
Ireland exports in 2018 reached over 166 bn USD, 20% higher
compared to 2017. The main export markets by value were the US with
a share of 28%, Belgium 13%, and the UK (not including Northern
Ireland) 10%.
Ireland exports to Northern Ireland represent 1.4% of Ireland's
total exports by value. Exports to the US increased by 24%, while
exports to Belgium, the 2nd largest export market for
Ireland, increased at 44%. Exports to the UK (not including
Northern Ireland) increased by 1% only, while exports to Northern
Ireland increased by 9%.
Ireland imports last year reached 106 bn USD, an increase of 19%
compared to the previous year.
The UK (not including Northern Ireland) is the largest supplier
at 22 bn USD, 20% of Ireland's total imports. UK exports to Ireland
increased last year by 9%. Northern Ireland is the 9th
largest supplier for Ireland at 1.7 bn USD.
Ireland's exports to Northern Ireland in 2018 reached 2.3 bn
USD, an increase of 9% compared to the previous year. Ireland's
imports from Northern Ireland in 2018 increased by 16% over 2017,
reaching 1.7 bn USD. Top exports and imports are presented in the
figures below.
Ireland's exports to Northern Ireland reached 3 million tonnes
last year, a decrease of 7% compared to the previous year. The
highest volumes traded were plastering materials, representing a
share of 27% of Ireland's total exports to Northern Ireland by
volume, and wood and articles of wood at 17% share. Plastering
materials exports decreased by 23% last year, and wood by 2%.
In 2018, Ireland's main imports from Northern Ireland by volume
were plastering materials, dairy, and mineral fuels, followed by
animal feed and cereals.
Total volume was 3.7 million tonnes, representing an increase of
10% compared to the previous year. Plastering materials account for
a 37% share of Ireland's total imports from Northern Ireland, and
dairy represents 20%.
UK (not including Northern Ireland) trade with
Ireland
In 2018, Ireland's exports to the UK (not including Northern
Ireland) by value reached 16.6 bn USD and increased by only 1%
compared to the previous year. Imports were 21.6 bn USD, 9% higher
than in 2017. Top traded products by value are shown in the figures
below.
Ireland's exports to the UK (not including Northern Ireland) by
volume reached close to 7 million tonnes in 2018, an increase of 5%
compared to the previous year. The volume of imports from the UK
was close to 14 million tonnes, also an increase of 5% over 2017.
The highest traded products are shown in the figures below.
This column is based on data from IHS Markit
Global Trade Atlas (GTA) and World
Trade Service (WTS). Risks, opportunities, impact on supply
chains and shipping industry can be identified for any products at
6-digit code level within
GTA. Insights can be complemented with the bill of lading data
from PIERS
and vessel movements via
AIS.
We provide The New Intelligence for strategic
decision-making to over 50,000 customers in 140 countries -
Governments and the private sector, including 80% of Global Fortune
500 companies.
Full description of HS codes used in the analysis: