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The Republic’s bilateral trade with France has mushroomed to a record €30 billion per annum in the wake of Brexit, according to a new report.
The study, launched at an event in the Irish Embassy in Paris attended by Minister of State at the Department of Enterprise Neale Richmond, highlighted Ireland’s expanded trading ties with France (now the State’s closest EU neighbour geographically) and the increasing importance of the French market for Irish exporters.
It noted that the State’s services exports to France almost doubled between 2016 and 2021 (from €6.4 billion to €11.4 billion) largely on the back of increased trade in financial services linked to the City of London losing its financial passporting rights under Brexit.
At the same time, Irish goods exports to France have risen by a third to €7 billion. France is now Ireland’s fourth biggest destination for agri-food exports with €1.2 billion of trade in 2021.
Central to Ireland’s increased economic ties with France is connectivity, the report said.
Direct maritime connections have more than tripled since 2020, with increased daily and weekly crossings from Dublin, Rosslare and Cork.
The report noted that Rosslare Europort was “underutilised” before Brexit, with just six departures per week to the European mainland, all to Cherbourg. “Today, there are more than 30, to Cherbourg, Le Havre, Bilbao, Dunkirk and Zeebrugge”, it said. This represents a five-fold increase as exporters seek alternatives to Ireland’s traditional landbridge route to mainland Europe through Britain.
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The report showed Irish companies employ more than 31,000 people in France while French companies in the Republic have created more than 30,000 direct jobs.
“The Brexit factor is relevant in the context of new value chains, manufacturing/handling, and to a certain extent, financial services, in export dynamics,” the report’s author and Dublin City University academic Christy Ann Petit said.
“Following Brexit, Ireland had to adapt and rethink its suppliers and trading partners, focusing more on Europe,” she said.
“The exit of the UK from the EU has caused an adaptation and acceleration of trade between Ireland and the 27 member states of the single market, and in particular, France,” she said, noting Ireland’s exports to the EU have risen by 27 per cent since the UK left.
Her report comes as Network Irlande, the Franco-Irish Chamber of Commerce, opens a new chapter in Lyons on the back of a growing network of Irish companies operating in France. One of the biggest is packaging giant Smurfit Kappa, which has 45 plants in France employing 6,000 staff, but the list also includes Kingspan, Davy, Erigrid and Kerry Group.
“A lot of work, pre- and post-Brexit, has gone into helping Irish firms to diversify away from the UK market and the increase in Franco-Irish trade is a direct manifestation of that, Mr Richmond said.
“Closer economic ties are being forged, particularly between our ports, our researchers and our industry, and co-operation is developing both nationally and specifically in the regions,” he said, highlighting a joint-declaration of intent on co-operation in the energy sector signed recently, which will accelerate the decarbonisation of both energy systems.
The report also highlighted Ireland’s growing attractiveness for French investment. The stock of French FDI (foreign direct investment) in the State has almost doubled from €17 billion to €32 billion over the past decade, and 2022 alone saw a 42 per cent increase. Ireland was the second most attractive country for French FDI in 2022 while it was the fifth largest investor in France in terms of FDI flows in 2020.
France is among the world’s leading investors in renewable energy by number of projects between 2015 and 2022 and is known to be eyeing projects in Ireland’s nascent offshore wind energy sector.
Laurent Saint-Martin, the chief executive of Business France, the state agency in charge of promoting international trade, said trade between the two countries is flourishing but “I think we can do more for French companies to export in Ireland and for Irish companies to export to France”.
On the thorny issue of Ireland’s low tax rate, long a source of friction between the two countries, he said: “What we can observe is that we are converging, France has reduced its tax rate from 33 per cent to 25 per cent now … Ireland is still lower but it has increased a bit.”
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