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Irish border troubles

Written on . Posted in Economics.

I came across this information in a discussion about what should be done about the border between Northern Ireland and the Republic.

Ireland’s top exports (Source: International Monetary Fund, World Economic Outlook Database (GDP based on Purchasing Power Parity). Accessed on February 18, 2017) http://www.worldstopexports.com/irelands-top-10-exports/

  1. Pharmaceuticals: US$31.8 billion (24.9% of total exports)
  2. Organic chemicals: $27.6 billion (21.5%)
  3. Optical, technical, medical apparatus: $13.1 billion (10.3%)
  4. Electrical machinery, equipment: $9.8 billion (7.6%)
  5. Perfumes, cosmetics: $8.6 billion (6.7%)
  6. Machinery including computers: $7.2 billion (5.6%)
  7. Aircraft, spacecraft: $3.8 billion (2.9%)
  8. Other chemical goods: $3.4 billion (2.6%)
  9. Meat: $3.2 billion (2.5%)
  10. Cereal/milk preparations: $2.5 billion (2%)

Most of these are specialised products having a high value in relation to their weight. Thus they can sent as air-freight. The UK is the only country with reasonably good surface transport links to the Republic. The Republic has no container port comparable with Felixtowe or Southampton, let alone Rotterdam or Hamburg. It cannot have. The population is too small to generate the necessary traffic.

This table below, from the same source, is also instructive: 15 of Ireland’s top export sales destinations, by dollar value during 2016. Also shown is each import country’s percentage of total Irish exports.

  1. United States: US$33.2 billion (25.9% of total Irish exports)
  2. United Kingdom: $16.3 billion (12.7%)
  3. Belgium: $16.3 billion (12.7%)
  4. Germany: $8.4 billion (6.6%)
  5. Switzerland: $6.9 billion (5.4%)
  6. Netherlands: $6.5 billion (5.1%)
  7. France: $5.4 billion (4.2%)
  8. China: $3.3 billion (2.6%)
  9. Spain: $3.2 billion (2.5%)
  10. Japan: $3.1 billion (2.4%)
  11. Italy: $2.6 billion (2.1%)
  12. Australia: $1.6 billion (1.3%)
  13. Israel: $1.6 billion (1.3%)
  14. Poland: $1.5 billion (1.2%)
  15. Mexico: $1.5 billion (1.2%)

After Brexit, most of the Republic’s exports will not be to EU countries.

All the trouble will be due to the EU’s rules for the Single Market coming into effect as the UK moves outside it. The same rules already cause similar damage to the economies of the regions on both sides of the EU’s eastern border, from Finland in the north to Ukraine in the south, taking in parts of the Baltic states, Belarus, Poland, Slovakia, Romania, Bulgaria, Serbia and the enclave of Kaliningrad, before 1945 Königsberg, an important commercial and industrial centre.

Perhaps the Republic should leave the EU too?