In the event of a no-deal departure, the UK would have to adopt basic World Trade Organisation (WTO) rules – setting a tariff rate that would apply universally, neither discriminating against nor benefiting any one country.
While it could choose its own tariffs, the common assumption is that it would initially apply existing EU rates. Such a move would have the capacity to decimate prices in certain sectors, including agriculture, and leave others virtually unscathed.
A detailed analysis conducted by Inter Trade Ireland on cross-Border patterns looked at how such a development would affect the numbers, based on 2016 statistics.
Of 5,000 individual products listed with the WTO, tariffs applied by the EU on non-members without a specific trade deal range from 0 to over 80 per cent. For Ireland, the 2 per cent of products that would incur tariffs of more than 35 per cent contributed 12 per cent of exports to the UK in 2016.
South to North trade in goods was valued at €1.65 billion in 2016 and €1.05 billion in the other direction. There are 1,933 product categories exported from the Republic to Northern Ireland and 2,269 products imported.
Live animals, meat, fish, dairy and vegetables account for 20.4 per cent of all Irish exports to Britain, and 20.5 per cent to Northern Ireland. In the other direction they make up 7.8 per cent of imports to Ireland from Britain, and 26.1 per cent from Northern Ireland.
Then there are the costs associated with “non-tariff barriers” (NTBs) such as customs inspections, increased paperwork, technical requirements including licensing, labelling and standards.
According to Inter Trade Ireland, such burdens are far more onerous on small firms.
Based on various tariff and non-tariff barrier scenarios, as well as exchange rate changes, applied to 2016 trade statistics, it estimated exports from Ireland to Britain would fall by between 8 and 20 per cent, and imports by between 3 and 6 per cent.
Exports to Northern Ireland could drop by between 8 and 21 per cent and imports by between 11 and 19 per cent.
Meanwhile, exchange rate movement has the capacity to increase reductions in trade from Ireland to the UK but offset some of the effect in the other direction.
