WTC Dublin Newsletter

INTERNATIONAL TRADE NEWS

IRISH EXPORTS SURGE TO A RECORD €165BN IN 2021

The value of Irish goods exports soared to a record €165 billion last year despite the disruption to global trade caused by the pandemic. However, the full-year figures for 2021 show trade with the UK had been impacted by Brexit. While Irish exports to Britain increased by €2 billion or 17% in the 12 months, imports from Britain were down by nearly €2.4 billion or 13%. Since the UK departed from the EU on January 1st, 2021, companies have faced increased customs requirements; however, the fall-off in imports has coincided with a significant uptick in cross-Border trade on the island of Ireland.

Data shows that imports from Northern Ireland increased 65% to almost €4 billion in 2021, while exports from the Republic into the North rose 54% to €3.7 billion. Under the Northern Ireland protocol, trade in goods with Britain is subject to customs checks.

However, while Northern Ireland remains within the customs territory of the UK, it is simultaneously within the European Union’s single market; therefore, the movement of goods between Northern Ireland and the Republic that are not subject to customs checks.

Northern Ireland Protocol Influence

Fine Gael TD Neale Richmond said the Northern Ireland Protocol had seen trade on the island of Ireland grow by 65%, and further growth must be facilitated through closer cooperation of trading agencies on the island. “Over two years into Brexit, the changes in trading patterns are beginning to truly bed in. Businesses and traders have shifted their trading patterns to the path of least resistance and are focusing their goods in the internal EU market. This is crucially important as just because North/ South political engagement has been parked. This does not mean that we cannot continue to grow the all-island economy. There is clearly an appetite for businesses to grow these trading links, North/South and indeed East/West,” he said. The CSO noted that exports of medical and pharmaceutical products drove the strong performance in exports overall. These accounted for 38% of all merchandise exports last year, valued at €62.6 billion. Exports to non-EU countries were valued at €103.8 billion in 2021, an increase of €5.8 billion (6%) compared to the 2020 level of exports. The US was the largest export destination in 2021, accounting for €52.5 billion or 32% of total goods exported. Imports in 2021 increased by 18% to €102.5 billion, exceeding €100 billion on an annual basis for the first time. Imports of other transport equipment, including aircraft, were valued at €14.4 billion or 14% of total imports.

Two industries that showed promising growth in Ireland were the Prepared Consumer Foods (PCF) and Drink sectors. PCF exports (including consumer-ready products, such as ready meals, pizzas, soups, and baked goods) increased by 3% last year to €2.5 billion. This performance reflected sustained strong sales across retail, most notably for the meal solutions category and for bread and value-added pig meat. Due to the pandemic in the first half of the year, food service closures continued to cause significant declines in the exports of processed cheese, value-added beef, and sweet bakery products. This category, which includes a wide range of consumer-ready products, is highly dependent on the UK, with just over two-thirds of exports destined for that market. This category’s most significant single element is value-added meats, which were significantly affected by pandemic closures in 2020. Last year, as food service reopened, exports increased by 4% to €677 million. PCF products that depend on retail had a positive year. The Meal Solutions subcategory, which includes pizzas, ready meals, and soups, increased its export value by 5% to a new record of €517 million.

The value of drinks exports increased by 19% to €1.62 billion last, which was a strong recovery after the difficulties of 2020 and returned exports in this category to 2019 levels. This recovery was most robust in Irish whiskey and cream liqueur exports, particularly to the US, with the export of this category worth €856 million last year, up 25% compared to 2020. The growing trend of premiumisation and the position of Irish whiskey in this segment led to the value of Irish whiskey exports increasing at a stronger pace than volumes. Not all categories within the drinks sector experienced the same level of recovery. Overall beer exports were down by 3% to €246 million. Beer exports are more exposed to UK and EU markets, and the closure of bars and nightclubs in many markets had a significant impact. A recovery in beer exports is expected as the hospitality industry reopens.

Sources:

• TheJournal.ie

• Bord Bia

• Irish Times