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UK exports to Ireland nearly halved in January and dropped sharply in the first quarter, reflecting the impact of the coronavirus pandemic, the trading challenges at the end of the EU transition period and stockpiling activity last year.
Exports of goods to Ireland fell 47.3 per cent between December and January, the greatest percentage fall of any top exporting partner during this period, data published on Tuesday from the Office for National Statistics showed.
However, the statistics office stated that, with one-quarter of the data available, it is too early to assess the extent to which this reflects short-term trade disruption or longer-term supply chain adjustments as the pandemic maintains its grip.
The UK trade with Ireland recovered somewhat in February and March, but it was still 30 per cent down in the first quarter compared with the previous three months. This was a much larger contraction than the 18 per cent recorded across the EU countries.
Chemicals, food and live animals showed the largest decreases in goods exports to Ireland in January as products faced extra checks when moving from Great Britain to Ireland.
These checks, as part of the Northern Ireland Protocol, have caused delays at the Great Britain and Northern Ireland border, the ONS said.
About 38 per cent of exporting businesses have reported additional paperwork as a challenge to exporting since February, a proportion that has remained stable through to last month.
The ONS reported that exports of food and live animals to Ireland faced the greatest number of added checks. This includes the introduction of export health certificates for animal products moving between Great Britain and Ireland.
Rules of origin stipulations in the EU-UK Trade Cooperation Agreement, which requires that all goods must be able to demonstrate that they “originate” in the EU or the UK to qualify for zero tariff treatment, might have led to additional costs.
However, the fall in the first quarter was made more dramatic by stockpiling activity in the last quarter of 2020, which boosted trade between the UK and Ireland in anticipation of the changing rules.
The ONS reported declining trade with Germany, the UK’s largest EU trading partner. Since April 2019, there has been a decline in imports from Germany, “which coincides with increased uncertainty around previous EU exit dates”, stated the ONS. From the second quarter last year, the UK has imported more from China than it has from Germany.