A new report has found that for 51% of Irish exporters, Northern Ireland is the destination for more than half of their exports.
The InterTradeIreland 'Cross-border trade and supply chain linkages' report found that for just over one-quarter of Irish firms, Northern Ireland is the destination for more than 95% of their exports.
Northern Ireland accounts for between 10 and 12% of total exports from Ireland to the UK as a whole - and accounts for up to 8% of imports.
It says that given that the population of Northern Ireland makes up less than 3% of the UK total, this shows "the closeness of the economic ties between the two jurisdictions".
The report finds that a very significant share of cross-border trade is accounted for by firms that trade simultaneously in both directions.
These two-way traders make up around 18% of firms, but accounted for over 60% of exports, and over 70% of imports.
The report also highlights a high level of ongoing product turnover among trading firms who regularly introduce new products to the market - with many goods traded for one year only.
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"This pattern is consistent across firms of all sizes and between food and non-food firms, and shows a high degree of innovation among cross-border traders", it says.
Business and Enterprise Minister Heather Humphreys says: " What emerges clearly from this research is the high degree of integration of the economies north and south.
"It illustrates that the cross-border market is dominated by SMEs, and that the ability to transport products, source components and sell services across the border in a seamless way is essential to thousands of business models.
"Even if firms don’t sell directly to the UK, there is a strong likelihood that they buy products from that market and, if they do, they will be impacted by Brexit."
"Disproportionate importance"
"In the last few weeks, I have met with the Northern Ireland Chamber of Commerce in Belfast and the Ibec-CBI Joint Business Council in Newry.
"The report’s findings echo the feedback I have received at these meetings, and as Minister for Business, Enterprise and Innovation, I am determined to do everything I can to sustain and grow cross-border trade on behalf of the Irish Government in the face of Brexit."
Aidan Gough, director at InterTradeIreland, adds: "This report shows the disproportionate importance of cross border trade for businesses across the island.
"The high degree of interconnectedness of supply chains, which the report points to, also increases exposure to a so-called hard Brexit
"The integrated nature of the supply chain and strength of cross-border trading relationships means that for many firms, the all-island economy becomes a ripe test-bed for new product innovation.
"There are fewer barriers to innovation because of previous supply chain knowledge and experience of bringing a product to market.
"We are recommending to firms who currently benefit from cross-border trade, or who source components goods or services from the UK, that they focus less on the significant noise and debate in the media about the on-going negotiations, and focus more on planning for a new trading relationship, with our support if needed."
Read the full report here
