The writer is the TD for Dublin Rathdown and the Fine Gael spokesman on European affairs
Whether there is a Brexit deal, or no deal, the economic impact on Ireland of the UK leaving the EU will be stark. This has always been the case and it is why Ireland’s first preparatory meeting for Brexit was held in December 2014, two years before the referendum took place.
The Irish economy has always been heavily exposed to the UK, even if the relationship has changed. When Ireland joined the European Economic Community in 1973, 55 per cent of exports went to the UK. This has since dropped to 9 per cent, while the EU now accounts for almost half of all Irish exports.
But in terms of food products, the UK is still Ireland’s biggest trading partner. Roughly 50 per cent of Irish beef, 34 per cent of dairy products and 80 per cent of mushroom sales go to the UK. After the 2016 Brexit referendum, the currency fluctuation wiped 10 per cent off the value of Ireland’s mushroom industry.
Diversification is key to protecting the Irish economy from the vicissitudes of Brexit. Since more than 80 per cent of Irish cheddar exports go to the UK, Irish farmers are exploring producing buffalo mozzarella. It also means finding new markets for Irish products. In 2018, €9m of Irish beef was exported to China, but export values are now projected to reach €120m. Boosting trade within the EU after Brexit is important too. The Irish government has bolstered its diplomatic presence across EU capitals and opened new consulates in Frankfurt and Lyon.
Since most Irish exports go through the UK, Ireland’s difficulty is not necessarily in selling its goods but in physically transporting them to the wider world. Ireland has invested in the ports of Dublin and Rosslare, and hired hundreds of customs officials so as to be ready to carry out the new inspections that come with the UK leaving the customs union.
Still, much of the freight travelling to and from Ireland is by road. Each year some 150,000 trucks transport 3m tonnes of freight across Britain’s “land bridge” to the continent. Because the journey to the EU is less than 20 hours by road — compared to between 40 and 60 hours by sea — the land bridge is preferable for moving food, live animals and other high-value goods. There are good reasons why the route has not been used as a bargaining chip in the Brexit negotiations, not least as it generates a return for the UK.
Still, the potential for delays on the British leg of the journey is a concern for Irish hauliers. Reports of possible lorry tailbacks entering Kent from France, and delays in recruiting customs staff, are worrying. As a result, the Irish government is encouraging traders to examine all appropriate options to ensure they can continue to move goods to, from and through Great Britain.
This includes the option of bypassing the UK altogether. Since the Brexit process began, shipping firms have been examining alternative continental destinations. Up to now, these were only suitable for certain non-perishable goods, as such crossings can be more expensive or longer.
That may no longer be the case. Direct sea crossings to long-established ports of destination in France have been supplemented with crossings to ports including Santander, Zebrugge and Lisbon. There remains capacity on these routes and, as Irish exports to the UK continue to drop, exporting through the UK will also decline post-Brexit — decline but not go away altogether.
As part of the EU, Ireland seeks a deal that will enable the best trading relations possible, given the circumstances. Those circumstances do mean that the Brexit trade negotiations are to an extent damage limitation. Ireland hopes to have a good trading relationship with the UK after Brexit; our geography requires this. But the future for Ireland is clearly aligned to Europe.