Thursday, 3 June 2021
Department of Enterprise, Trade and Employment
196. To ask the Minister for Enterprise, Trade and Employment if he remains satisfied that Ireland’s export market continues to be accessible in the immediate aftermath of Brexit; if particular or specific challenges have been identified as potential major obstacles for Irish exporters and importers; if contingency measures have been fully decided upon and are now in place; and if he will make a statement on the matter. [8971/21]
As the Deputy will appreciate, Brexit has fundamentally changed the trading relationship between Ireland and the UK and will continue to impact that trading relationship. Since the EU-UK Trade and Cooperation Agreement came into force, there has been some short-term disruption arising from the new requirements around customs and SPS checks and controls. Businesses are however gradually adjusting to the new trading realities, finding alternative supply chains and are being encouraged to find new markets for their products.
The most recent CSO statistical data release indicates that the value of goods exports to Great Britain in the first quarter of 2021 was €3,033 million, a decrease of €82 million (-3%) on the first quarter of 2020. However, exports to Great Britain increased by €139 million (+13%) to €1,216 million in March 2021 compared with March 2020. Exports to Great Britain accounted for 8% of total exports. The value of goods imports from Great Britain for January to March 2021 was €2,204 million, a decrease of €2,002 million (-48%) compared with January to March 2020.
It is too early, based on statistics for the first quarter of 2021, to get a real sense of the impact that Brexit will have on longer term trade flows as there are other contributory factors, not least COVID-19 that has also had a chilling economic effect. Analysis of trade flows over a longer period of time would be required to allow for sound conclusions to be drawn.
Since January 2021, Enterprise Ireland has engaged with client companies through surveys and focus groups to understand the impacts for companies on the new trading relationship with the UK. Companies across all sectors identified common challenges such as the potential disruption from Import Checks which are set to begin in October; supplier issues and transport and logistics; and general competitiveness of businesses because Brexit – related customs procedures and added supply chain costs have increased the costs to businesses.
Notwithstanding the new business challenges, the UK continues to be a strategic market of importance for Irish companies. A recent survey of Enterprise Ireland clients currently operating in the UK market reported that 89 percent see future opportunities in the UK while 83 percent report that their strategy is to grow exports to the UK.
While Enterprise Ireland clients are continuing to diversify their export markets, the UK market remains the largest export market for Enterprise Ireland clients. In 2019, Enterprise Ireland clients reported €7.9 billion in exports to the UK, representing 31 per cent of total client exports. Enterprise Ireland remains committed to working with client companies to assist them sustain and grow their business, both in the UK, and through market diversification. This will be delivered through a comprehensive programme of funding, advice and in-market supports to get customs ready, remain competitive in the UK and identify future growth opportunities.
The Government is also committed to ensuring that the most Brexit impacted sectors of the economy will be supported and assisted. The Deputy will be aware that economic analysis carried out in 2018, updated in January 2020, on the economic impacts of Brexit on the Irish economy, identified the Agri-Food sector as the one most likely to be most seriously impacted. In that respect, the €100 million Capital Investment Scheme for the Processing and Marketing of Agricultural Products, managed by Enterprise Ireland, is just one of the ways the Government is helping the Agri-Food sector manage the fallout from Brexit.
The EU Brexit Adjustment Reserve and the proposed significant allocation of funding to Ireland under this fund is strong recognition of the fact that Ireland is one of the most impacted Member States by Brexit. The fund will be used to mitigate the worst impacts of Brexit for the most impacted sectors in the economy.