Four EU Free Trade Agreements: Opportunities and Impacts for Ireland
The Department of Enterprise, Trade and Employment in Ireland commissioned Copenhagen Economics to undertake a study to consider the impact of four EU free trade agreements (FTAs) on Ireland’s trade and economy: the EU-South Korea FTA, the EU-Canada FTA (CETA), the EU-Japan FTA, and the updated EU-Mexico FTA.
We assess the economic impacts of these FTAs on the Irish economy. Our assessment relies on model simulations for the Irish economy using an acknowledged Computable General Equilibrium (CGE) model. We use the CGE model to quantify the expected macroeconomic and sectoral impacts of the FTAs on the Irish economy in 2030.
The main conclusions of our study are:
- The four EU FTAs will increase exports, imports, firm productivity, GDP, national income, and real wages in Ireland. The largest expected real wage increase is found for low-income workers.
- We estimate that Irish GDP will be 2.3 per cent higher in 2030, than it would have been in the case without the four FTAs in place.
- The main sectors in Ireland that are expected to gain from the four FTAs are business and ICT services, chemicals and pharmaceuticals, electrical machinery, wholesale and retail, and other manufacturing.
- These impacts only benefit Ireland if Irish business take advantage of the added opportunities that the FTAs bring. The policy focus in Ireland should be to pursue the export opportunities arising from the FTAs. For example, this can be achieved through policies to raise the awareness and understanding of FTAs.
The study is commissioned by The Department of Enterprise, Trade and Employment in Ireland.