Dáil Éireann Debate, Tuesday - 9 November 2021
275. Deputy Bernard J. Durkan asked the Minister for Finance if he will indicate the ongoing effect of Brexit on the economic performance in Ireland as well as other EU Member States; and if he will make a statement on the matter. [54726/21]
View answerMy Department has been to the fore in producing a number of assessments on the economic impact of Brexit. Joint analyses by my Department and the Economic Social Research Institute (ESRI) modelling the macroeconomic impact of Brexit were published in 2016 and 2019. The analyses covered a range of outcomes and possible future relationships between the EU and the UK.
The analyses included a limited Free Trade Agreement based on zero tariffs and zero quotas on the goods side with very little covered in respect of services. Overall this is broadly in line with the Trade and Cooperation Agreement (TCA). Under this Free Trade Agreement scenario, the research found that the level of GDP would be around 2 per cent lower over the medium-term (i.e. 5 years) and around 3 per cent lower over the long-term (i.e. 10 years), compared to a situation where the UK remained in the EU.
In light of the COVID-19 pandemic additional analysis was also jointly undertaken with the ESRI in 2020. The research found that the long term impacts of Brexit were broadly in line with analyses undertaken prior to the pandemic.
The TCA arrangements were introduced on 1 January 2021 across the EU for imports from the UK. In contrast, the UK has chosen to implement the new procedures on its imports from the EU on a phased basis with full customs checks planned to be introduced from the first quarter of 2022. Given this phased introduction, the full economic impact of Brexit will not be evident for some time
The data so far this year show that Irish goods imports from the UK have declined by almost 20 per cent in annual terms. Exports have, however, increased over the same period, as these grew by 25 per cent. The stark divergence between exports to, and imports from the UK, suggest that the diverging non-tarriff barriers have had an immediate impact on bilateral trade.
Notably, most other EU countries also recorded a decline in imports from the UK in the first half of this year, with the share of imports from the UK well below the pre-Brexit share in most EU member states. Exports for the majority of EU member states to the UK have increased in the first half of 2021, however the share of exports to the UK has declined relative to the pre-Brexit period for most EU member states.
The Department will monitor, and report on, additional data over the course of this year and, more importantly, next year once UK customs checks are fully applied by the UK authorities.
