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Brexit Impacts: Opportunities for German-Irish Trade

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  • Morgenroth, Edgar

Abstract

While there is still uncertainty whether and how the UK will leave the EU, a hard or no-deal Brexit is still a possibility. Under such a scenario the EU will impose most favoured nation tariffs on imports from the UK, which will impact on import prices. This will change the relative attractiveness of imports from other EU countries compared to that for imports from the UK. This means that sourcing from alternative markets. This paper considers imports from the UK to Germany and Ireland and the degree to which these can be replaced by Irish or German goods respectively. The analysis uses detailed 6 digit trade data for 2017 in conjunction with the EU-WTO tariffs, which are assumed to be passed through perfectly. The impact of additional transport costs given the longer transport distance is accounted for. The results suggest that there are significant opportunities for trade reorientation with potential in over half of the all the six digit product groups that are currently imported from the UK.

Suggested Citation

  • Morgenroth, Edgar, 2019. "Brexit Impacts: Opportunities for German-Irish Trade," MPRA Paper 96602, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:96602
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    File URL: https://mpra.ub.uni-muenchen.de/96602/1/MPRA_paper_96602.pdf
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    References listed on IDEAS

    as
    1. McQuinn, Kieran & O'Toole, Conor & Economides, Philip & Monteiro, Teresa, 2018. "Quarterly Economic Commentary, Spring 2018," Forecasting Report, Economic and Social Research Institute (ESRI), number QEC2018SPR.
    2. Bergin, Adele & Duffy, David & Foley, Daniel & Garcia Rodriguez, Abian & Lawless, Martina & Mc Inerney, Niall & McQuinn, Kieran, 2016. "Ireland’s Economic Outlook: Perspectives and Policy Challenges," Forecasting Report, Economic and Social Research Institute (ESRI), number EO1 edited by Bergin, Adele & Morgenroth, Edgar & McQuinn, Kieran.
    3. Davies, Ronald B. & Studnicka, Zuzanna, 2018. "The heterogeneous impact of Brexit: Early indications from the FTSE," European Economic Review, Elsevier, vol. 110(C), pages 1-17.
    4. Adele Bergin & Abian Garcia-Rodriguez & Edgar L. W. Morgenroth & Donal Smith, 2017. "Modelling the Medium- to Long-Term Potential Macroeconomic Impact of Brexit on Ireland," The Economic and Social Review, Economic and Social Studies, vol. 48(3), pages 305-316.
    5. Lawless, Martina & Morgenroth, Edgar, 2017. "Ireland’s international trade and transport connections," Papers WP573, Economic and Social Research Institute (ESRI).
    6. Bergin, Adele & Economides, Philip & Garcia-Rodriguez, Abian & Murphy, Gavin, 2019. "Ireland and Brexit: modelling the impact of deal and no-deal scenarios," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI).
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    8. Martina Lawless & Edgar L. W. Morgenroth, 2019. "The product and sector level impact of a hard Brexit across the EU," Contemporary Social Science, Taylor & Francis Journals, vol. 14(2), pages 189-207, April.
    9. Edgar Morgenroth, 2000. "Exchange rates and trade: the case of Irish exports to Britain," Applied Economics, Taylor & Francis Journals, vol. 32(1), pages 107-110.
    10. Lawless, Martina & Morgenroth, Edgar, 2018. "Brexit and Irish Consumers," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI).
    11. Barrett, Alan & Bergin, Adele & FitzGerald, John & Lambert, Derek & McCoy, Daire & Morgenroth,Edgar & Siedschlag, Iulia & Studnicka, Zuzanna, 2015. "Scoping the Possible Economic Implications of Brexit on Ireland," Research Series, Economic and Social Research Institute (ESRI), number RS48.
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    More about this item

    Keywords

    Brexit; trade diversion; market share;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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