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British exports to Ireland almost halved in January and fell sharply in the first quarter, reflecting the impact of the coronavirus pandemic, trade challenges at the end of the EU’s transition period and the storage activity last year.
Exports of goods to Ireland fell 47.3 percent between December and January, the largest percentage drop of any major exporting partner during that period, according to data released Tuesday by the Office for National Statistics.
However, the statistics office said that with a quarter of the data available, it is too early to assess to what extent this reflects short-term trade disruption or longer-term supply chain adjustments as the pandemic maintains its grip.
UK trade with Ireland recovered somewhat in February and March, but was still down 30 percent in the first quarter from the previous three months. This was a much larger contraction than the 18 percent recorded in EU countries.
Chemicals, food and live animals posted the largest declines in exports to Ireland in January, as products were subject to additional controls when moved from Britain to Ireland.
These checks, under the Northern Ireland Protocol, have resulted in delays at the border between Britain and Northern Ireland, the ONS said.
About 38 percent of exporting companies reported additional paperwork as a challenge for exporting since February, a proportion that remained stable until last month.
The ONS reported that exports of food and live animals to Ireland were subject to the most additional controls. This includes the introduction of export health certificates for animal products moving between Great Britain and Ireland.
The rules of origin stipulated in the EU-UK trade cooperation agreement, which requires all goods to be able to demonstrate that they “originate” in the EU or the UK in order to qualify for treatment zero tariff, could have resulted in additional costs.
However, the decline in the first quarter was made more dramatic by storage activity in the last quarter of 2020, which boosted trade between the UK and Ireland in anticipation of changing rules.
The ONS reported a decline in trade with Germany, the UK’s largest trading partner in the EU. Since April 2019, there has been a drop in imports from Germany, “which coincides with increased uncertainty around previous EU exit dates,” the ONS said. Since the second quarter of last year, the UK has imported more from China than from Germany.