The UK is Ireland’s most important market, with the value of Irish exports from the Republic of Ireland to the UK at their highest ever level. Ireland and Britain trade over €1 billion worth of goods and services every single week.
It’s also worth bearing in mind that the Irish market is just as important to the UK – in fact, the UK exports more per annum to Ireland than it does to China, India and Brazil combined. Ireland is now the UK’s 5th largest market. This is helped by the UK being the 3rd largest investor in Ireland, after the US and Germany.
In terms of land mass, the Republic of Ireland is significantly larger at 70,273 km2 compared to Northern Ireland at 14,130 km2. However, the gap in population is closer with the Republic’s population at 4.5 million compared to the more densely populated North at 1.8 million.
The Republic of Ireland economy is currently the fastest growing economy in the EU with high-tech industries behind much of this growth. In 2015 the Republic was ranked the 9th most economically free economy in the world by the Wall Street Journal. Other industries showing growth in the Republic are pharmaceuticals, engineering and IT services.
The economy of Northern Ireland is the smallest of the four countries of the United Kingdom. Northern Ireland previously had a traditionally industrial economy, most notably in shipbuilding, rope manufacture and textiles, but most heavy industry has since been replaced by services. Aircraft components, quarry machinery and heavy plant manufacturing remain important contributors to exports from Northern Ireland.
When looking at the Ireland region, there must be a distinction between the Republic of Ireland and Northern Ireland markets. Northern Ireland is part of the UK therefore it’s relatively straightforward in terms of currency, corporation tax, VAT and customs procedures. In contrast, the Republic of Ireland uses the Euro currency, has a lower corporation tax of 12.5% and VAT is slightly higher at 23%.
However, trade is relatively straightforward between the UK and Ireland as both countries opted out of the Schengen agreement so trade between both nations is efficient and without barriers.
So what are the key gateways to the Irish market? As an Island both parts have excellent shipping links with the UK with continuous investment in their primary ports.
Belfast is the major port in Northern Ireland handling 23 million tonnes in 2015. This equated to 66 per cent of total freight in and out of the North. Belfast Port is well equipped to handle RoRo, LoLo and bulk freight. The other primary ports are Warrenpoint with 11.5 per cent of freight handled in 2015 and Larne with 10.1 per cent over the same period. The total tonnage freight handled by ports in the north was 25.3 million tonnes, 15.6 million tonnes was inwards and 9.7 million tonnes outwards so there is clearly a trade imbalance. The positive news for the Northern Ireland economy is that the 2015 volume saw a year-on-year increase of 0.9 per cent.
Although there are no direct deep sea links with Northern Ireland ports, there is excellent RoRo provision to Cairnryan, Heysham and Birkenhead in addition to LoLo services to Le Havre, Rotterdam, Liverpool and Antwerp.
Belfast International Airport is the primary handler of air freight for Northern Ireland, handling approximately 25,000 tonnes of freight per annum and outside of London is the third biggest handler of air freight in the UK. Current air freight links with Belfast are to the UK and Paris.
Republic of Ireland:
Unsurprisingly Dublin is the primary port for goods entering and leaving the Republic of Ireland, handling 32.8 million tonnes in 2015 which is around 65 per cent of total freight tonnage shipped in and out of the Republic in 2015. Total volumes were up 8 per cent year on year with LoLo at 860,277 TEU between Dublin and Cork and RoRo volume at 1,002,920 split 88 per cent via Dublin port and 12 per cent via Rosslare.
Ports in the Republic of Ireland share the same excellent RoRo and LoLo links as Northern Ireland. However, one distinct advantage for the Republic is a direct freight RoRo service between Rosslare and Cherbourg in France thus enabling hauliers to bypass the GB land bridge.
Dublin airport is one of the fastest growing airports in Europe recording 28 million passengers in 2016, an 11 per cent year-on-year increase. In terms of air freight it handled 119,448 tonnes of freight with roughly a 50/50 split between import and export traffic, 2015 saw a year on year increase of 12.3 per cent.
The growth at Dublin airport has been aided by excellent capacity with over 180 routes around the world including the 5th largest capacity to North America from Europe.
The Irish market will remain vitally important for the UK and vice versa going forward. However, Brexit may present some challenges with regards to the Irish border potentially becoming an international frontier should the UK leave the EU customs union which looks increasingly likely. This will no doubt prove a challenge to both sets of politicians but because of the close economic and social links the UK currently enjoys with Ireland, we should expect the healthy trading relationship to continue beyond Brexit.