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Irish cross-border trade not reflected in UK trade data
Tuesday, 18 May 2021
By Patty Clayton
This article has been updated with revised trade data from HMRC (08 June 2021)
UK dairy exports to the EU have recorded large drops since 1 January, as exporters face new trading conditions. This was mostly expected due to the impact of increased costs and customs related administration. However, it was thought that trade between Northern Ireland (NI) and the Republic of Ireland (ROI) would not be affected due to the NI protocol, which was put in place to keep this trade ‘free and frictionless’.
Northern Ireland’s most traded product with ROI in terms of volumes is raw milk[1], which is typically processed in the south due to a lack of domestic capacity. However according to reported trade data, this cross-border trade has all but ceased, with export volumes of raw milk at less than 1% of normal levels so far in 2021. This raised the question of how the industry in NI was dealing with this milk, given its lack of processing capacity.
In fact, it appears that trade has continued. According to Ireland’s Central Statistical Office (CSO), there have been over 120,000 tonnes of raw milk imported from NI in the first two months of 2021.
This suggests that some of the UK’s trade to the EU (particularly from Northern Ireland) has not yet been recorded in the trade statistics. This is likely a consequence of the changes to internal systems and procedures at HMRC, which mean only GB trade data is captured in some datasets.. As such, we may not be able to assess the true impact of leaving the EU until both GB and NI trade figures are combined.
[1] Milk of a fat content between 1-6% (HS code 040120).
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