Brexit cut UK-EU trade by almost 20%

Brexit caused a fall of almost a fifth in trade between the European Union (EU) and the UK, with goods to Ireland particularly affected, a working paper by Ireland’s Economic and Social Research Institute (ESRI) said on Wednesday.

It resulted in a “substantial negative impact” for trade in both directions, it added.

Trade from the UK to the EU decreased 16 percent while there was a 20 percent drop in trade from the EU to the UK, compared to a no-Brexit scenario, the ESRI working paper read.

The analysis looked at product-level data on goods trade flows for 2021 — the first full year of the UK’s withdrawal from the European bloc.

“Across EU member states, we find that Brexit has led to a significant decline in trade with the UK in almost all cases although by varying magnitudes,” the working paper authors Janez Kren and Martina Lawless wrote.

“Although goods trade between the EU and UK recovered most of its previous level in value terms following the sharp fall in the early months of 2021, this recovery leaves it well below the levels that would have been expected if it had performed on a comparable level with other trade partners.” they added.

For most countries, the fallout in imports and exports was similar, though Ireland stands out has having had a particularly large fall in imports from the UK, the authors said.

They added that there has been “no notable impact to date” on exports from Ireland to the UK. This may be partly attributable to grown trade between Ireland and Northern Ireland, they explained.

The research used a premise for comparison that trade with the UK should have been expected to grow at a similar pace to trade with other EU partner countries worldwide.

Although EU-UK trade recovered in value terms after a drop in early 2021, it is “well below” what would have been expected if it had performed on a comparable level with other trade partners, the report stated.