Brexit continues to hamper UK trade as imbalances increase

Brexit | | MIC Customs Solutions |

The disparity between imports and exports with Ireland during the Brexit transition has been revealed, while Liz Truss seeks a trade partnership elsewhere.

More than six months after the UK left the EU, its transition away from the bloc is still developing. Trade deals continue to be negotiated as the nation seeks to reap the benefits of leaving Europe. Meanwhile, the realities of trading with Ireland have emerged.

Ireland benefits from post-Brexit trade imbalance

In the first six months after Brexit, imports and exports between Ireland and Great Britain experienced a dramatic trade imbalance. Exports from Ireland increased, according to official figures from the government, while imports going in the other direction declined.

Goods exports to Great Britain, but not including Northern Ireland, rose by 20 percent in the first half of 2021, compared to the same period in 2020. That represents an extra €1.1 billion, taking the total to €6.7 billion, the Irish Central Statistics Office (CSO) has revealed.

In contrast, the value of items entering the Republic of Ireland from Great Britain fell by 32 percent. That equates to a €2.5 billion reduction, taking the total imports to €5.3 billion for the same period and highlighting the disparity.

Food products, live animals and manufactured goods were the areas hardest hit, the CSO revealed.

British exports hit hard by Brexit

Border checks on shipments to the EU implemented from January 1st have hit British exporters hard. In comparison, Irish and EU exporters to Britain have taken advantage of a 12-month phasing-in period, which was the choice of the UK government.

Also, while all exports of food and plant products to the EU have undergone sanitary and phytosanitary checks since January, corresponding red tape in the opposite direction is lagging behind. Such checks on imports into the UK will not come into force until January 2022, a whole 12 months later.

This can be seen in the figures associated with food and live animals originating in Ireland and being sent to Great Britain, which increased from €315 million in June 2020 to €322 million in June 2021. During the same timeframe, imports to Ireland fell from €243 million to €119 million.

Overall exports to Great Britain in June reached €1.42 billion, up by €575 million from a year before. The chemical, machinery and transport equipment sectors were largely responsible for such rises. 

Britain on track to join CPTPP by December 2022

The government is aimed to make up for some of these issues by turngin to markets outside the EU. To this end, Liz Truss, the UK’s international trade secretary, has spoken out about her hopes for Britain to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). She says that talks with the 11 member states are at the centre of “Global Britain’s” trade agenda in the wake of Brexit.

Securing a place within the group could be worth £9 trillion to Britain, as it joined the likes of Chile, Malaysia and New Zealand. Ms Truss also hopes the US will rejoin the partnership, which it left in 2017 during the Trump administration.

She told the Payne’s Politics podcast: “The United States was one of the initial parties in the Trans-Pacific Partnership, and the new administration has not indicated they want to join it. But who knows what might happen in the future.”