Friday, November 19, 2010
Ireland and UK exports
Posted by David Smith at 06:00 PM
Category: Thoughts and responses

There are bigger issues in the rescue of Ireland than the vulnerability of UK exports to a further downturn in the Irish economy. Still, it is a puzzle. The Irish Republic, as everybody from the prime minister down keeps reminding us, is a more important UK export destination than the BRICs' economies - Brazil, Russia, India and China - combined.

Let's dig into that a bit. Last year UK exports to Ireland were 15.9 billion, imports 12.5 billion, a rare UK bilateral surplus of 3.4 billion. However, UK exports fell sharply between 2008 and 2009, from 19.1 billion, a drop of nearly 17%, so they have already taken a substantial fall.

More importantly, though it is hard to be precise, the nature of UK exports to Ireland is different to those to countries further afield. Some of it reflects border area trade. Some of it may also reflect trade that happens to come through the UK, and in particular Northern Ireland, but which originates elsewhere in Europe. The trade effect is less important than financial and banking effects.