A Review of Possible Impacts of Brexit on Irish Trade with the United Kingdom
Given the geographical proximity to the UK, movement of goods has always been very significant between the two states.
Roughly 91,000 Irish countries trade with the United Kingdom. Ireland exports €15.6 billion worth of goods to the UK annual and imports about €18 billion of goods. In terms of services, more than €11 billion worth of services are imported from the UK while €18 billion are exported (CSO). With Brexit just around the corner, the Revenue Commissioners of Ireland considered the vast economical and physical impact in an unpublished report that RTÉ News recently elaborated on. Brexit will surely impact all member EU states but, the effect on Ireland will be greater, being the only EU country to share a land border with the UK.
The report indicates that from a customs standpoint, having an open border between Ireland and Northern Ireland will probably be out of the question. Presently, about 13,000 commercial vehicles cross the border everyday while free movement exists. However, post-Brexit there would likely be a mandate requirement of both a form of electronic notification as well as during the physical arrival of the goods at an assigned customs station. Furthermore, on arrival the goods will be considered to be in ‘temporary storage’. To move beyond temporary storage, the goods must either go through a customs procedure or re-exported. The Revenue Department expects a substantial increase in temporary importation/exportation, post Brexit, due to Ireland’s propinquity to Britain.
After Brexit there can be a dramatic increase in custom declarations which will create a large amount of paperwork for Revenue, An Post and traders. Even small regional ports and airports will require extra physical infrastructure and human resources; thereby requiring further investment by the Irish authorities. Post-Brexit, as the negotiations are completed, UK will have to be treated as a third country. Hence, associated formality cannot be ignored. Amongst the extra paperwork, an ENS or a safety entry summary will be required. The Entry Statement Declaration (ENS) will include information of the company sending and receiving the goods along with carrier and transport document references. The ENS will also contain a detailed description of the goods and where they are to be loaded and unloaded.
The Role of WTO
If it’s a case that the UK must exit the negotiations without an agreement; then any trade between the two countries will be performed under the World Trade Organisations rules and regulations. This would mean that all UK goods entering the EU will be subject to an extensive range of tariffs.
The Irish import and export industry is determined and influenced by EU law. All goods exported to UK will have to be declared for import and will be subject to UK import duty; which will be under the control of the UK government. All exports post-Brexit will be met by an extra layer of formalities leading to delays in the release of goods. This will most likely have negative effects on trade between the two countries.
Ships operating between different EU ports maintain their EU status. Therefore, the UK and Ireland will not be able to take advantage of the arrangements presently in place. Shipments from the United Kingdom will also attract higher separate tariffs, as they are often small mixed consignments.
Ireland has always heavily relied on the UK for trade and vice versa. In lieu of Brexit, the present trade terms and agreements between the countries is under threat. However, the Revenue Commissioners foresight is constrained until the negotiations are finalised and Britain’s ultimate intentions are made clear.