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Cross-Border Trade & Supply Chain Linkages

Published on 6th March 2018

Report reveals crucial importance of cross-border trade

Minister for Business, Enterprise and Innovation Heather Humphreys, TD, today unveiled research showing that for over half (51 per cent) of Irish exporters, Northern Ireland is the destination for more than 50 per cent of their exports.

InterTradeIreland’s “Cross-border trade and supply chain linkages” report found that for just over a quarter of Irish firms, Northern Ireland is the destination for more than 95 per cent of their exports.

Key findings include:

  • Northern Ireland accounts for between 10 and 12 percent of total exports from Ireland to the UK as a whole and accounted for seven to eight per cent of imports. Given that the population of Northern Ireland makes up less than three per cent of the UK total, this shows the closeness of the economic ties between the two jurisdictions.
  • The reports finds that a very significant share of cross-border trade is accounted for by firms that trade simultaneously in both directions. These two-way traders make up around 18 per cent of firms but accounted for over 60 percent of exports, and over 70 per cent of imports.
  • The report highlights a high level of ongoing product turnover among trading firms who regularly introduce new products to the market, with many goods traded for one year only. This pattern is consistent across firm of all sizes and between food and non-food firms, and shows a high degree of innovation among cross-border traders.

Welcoming publication of the report, Minister Humphreys said: “This report by InterTradeIreland is a welcome contribution to our understanding of the context around Brexit. What emerges clearly from this research is the high degree of integration of the economies north and south. It illustrates that the cross-border market is dominated by SMEs, and that the ability to transport products, source components and sell services across the border in a seamless way is essential to thousands of business models.

“Even if firms don’t sell directly to the UK, there is a strong likelihood that they buy products from that market and, if they do, they will be impacted by Brexit. All companies should ask themselves key questions about their supply chain and get started by accessing up to €2,000 in funding and support from InterTradeIreland.

“In the last few weeks, I have met with the Northern Ireland Chamber of Commerce in Belfast and the Ibec-CBI Joint Business Council in Newry. The report’s findings echo the feedback I have received at these meetings, and as Minister for Business, Enterprise and Innovation, I am determined to do everything I can to sustain and grow cross-border trade on behalf of the Irish Government in the face of Brexit. The all-island economy is as important in human terms as it is in economic terms to communities on both sides of the border, and I will be doing everything I can to support InterTradeIreland in its crucial work.”

Companies that trade across the border were also revealed to be more likely to introduce new goods and services, with 35 per cent introducing products for just one year.

Aidan Gough, Director at InterTradeIreland, said: “This report shows the disproportionate importance of cross border trade for businesses across the island and the high degree of interconnectedness of supply chains. “The integrated nature of the supply chain and strength of cross-border trading relationships means that for many firms, the all-island economy becomes a ripe test-bed for new product innovation. There are fewer barriers to innovation because of previous supply chain knowledge and experience of bringing a product to market.

“We are recommending to firms who currently benefit from cross-border trade, or who source components goods or services from the UK, that they focus less on the significant noise and debate in the media about the on-going negotiations, and focus more on planning for a new trading relationship, with our support if needed.”

For further information on funding and advice available visit intertradeireland.com/brexit

A copy of the Cross-Border Trade & Supply Chain Linkages Report can be viewed here

Download the report

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