Ireland and Britain exchange more than €1 billion in goods and services each week and Irish exports to Britain this year are worth more than €1.2 billion a month.
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The report, Scoping the Possible Economic Implications of Brexit on Ireland, by Alan Barrett, Adele Bergin, John FitzGerald, Derek Lambert, Daire McCoy, Edgar Morgenroth, Iulia Siedschlag and Zuzanna Studnicka, of the Economic and Social Research Institute (ESRI), is published Thursday and the research was conducted under the joint Department of Finance and ESRI Research Programme on The Macro-economy and Taxation.
The potential consequences include “downard pressure on prices”, not to mention difficulties in trade between the Republic and Northern Ireland, as well as barriers to cross-border investment.
British prime minister David Cameron has committed to holding a referendum on European Union membership by the end of 2017.
The possibility of a restriction on the free movement of people could also have a negative impact on the Irish labour market as the United Kingdom is an important destination for Irish emigrants, especially at times of high unemployment, while there could also be a displacement of immigrants from the United Kingdom to Ireland.
The survey also looked at how well people know each other, asking if people had experienced either a day-trip or an overnight stay across the border and it seems more people from Northern Ireland have travelled south than people from the Republic have travelled north.
Two thirds of people surveyed in the Republic said they were in favour of the motion although 20% “didn’t know” where they stood on the issue.
“Our analysis suggests this would not be significant”, said Dr Morgenroth. “Certain types of products are much more exposed to the impact of a Brexit, including a few of the food items”.
Irish companies and those close to the border, which rely on sales to Northern Ireland would, be most affected.
A Brexit could also mean increased energy costs for Ireland.
The analysis suggests that larger European Union member states, such as Germany, France, Italy, Spain and Poland would benefit more than Ireland.
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On account that numerous multinationals in Britain, such as carmakers, are in sectors unlikely to locate in Ireland; and that Ireland is a small economy already punching above its weight in inward investment terms, it said any additional attractiveness of Ireland to new foreign direct investment projects is likely to be small.
