The Irish agriculture and food sectors would be severely exposed to a British exit from the European Union, according to a new report from the ESRI.
With the UK government committed to holding a referendum on membership of the EU, ESRI researchers explored the economic links between Ireland and the UK and scope out the possible economic consequences of Brexit for Ireland.
According to the report ‘Brexit’ is likely to significantly reduce bilateral trade flows between Ireland and the UK. It says the impact could be 20% or more.
While the 20% estimate is an average figure, the impact would differ significantly across sectors and products.
The ESRI says sectors such as agriculture, food and beverages and basic metals are relatively more dependent on exports to the UK and so the impacts on them would be more severe.
According to the report, the UK might remove trade barriers from what are now third countries, for example on agricultural and food products, which would impact on Irish exports of such products to the UK by increasing competition and reducing prices.
Importantly, it says while boneless beef exports to the UK accounted for just 3.9% of total exports to the UK, this constitutes 43.9% of chilled boneless beef exports from Ireland.
Similarly, while other cheese accounts for 2.7% of exports to the UK, this represents 58.1% of all exports of that product.
Overall, the UK is a particularly important export destination for food products and in many products the share of exports accounted for by the UK is in excess of 50% and as high as 100%.