Report finds UK to EU trade 16% lower than if Brexit had not happened

Trade from Britain to the bloc is down on levels anticipated if the country had not left the EU, research has found.

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An Irish think-tank has calculated British good exports to the EU and European goods to the UK are significantly lower because Britain has exited the single market.

Research by the Economic and Social Research Institute (ESRI) has found that trade levels from the UK to the EU is 16 percent less than levels anticipated if Brexit had not taken place. The ‘How has Brexit changed EU-UK trade flows?’ report finds that trade from the EU to the UK has declined by an even steeper 20 percent, the study revealed.

To estimate what UK import and export figures with the European Union would look like if the Brexit vote had not happened, the study used growth rates recorded since the start of 2021 by other European trading partners around the world. The figures were calculated under the assumption that UK trade would have grown as the same rate as other international partners trading with the EU.

Post-Brexit trading arrangements came into operation at the beginning of 2021, at the end of the transition period.  According to the Economic and Social Research Institute, which was founded in Ireland to provide evidence-based research to inform public policy debate and decision-making, the trade of goods between the EU and the UK had risen, following a sharp fall early in 2021. In value terms, trade had recovered to most of its pre-2021 level. However, it remains markedly lower than if the UK had not voted to leave the EU, if it had followed the same growth rate as other international trade partners with the EU.

The ESRI says Ireland stands to have a large decline in imports from the UK, relative to its other international trade patterns. Although exports from Ireland to Britain continue to perform similar to other markets, the research believes this may be due to boosted trade between Ireland and Northern Ireland. In 2021, the value of British goods slumped by 40 percent compared to in a no-Brexit model. Other significant fallers in the value of British goods is Spain at 32 percent, Sweden at 25 percent, and Germany at 24 percent, the research found.

British exports now face the EU customs and sanitary checks, thereby increasing costs and delays, and making low-margin products unprofitable. Many British firms that produce goods on low profit margins have stopped shipping to the EU altogether.

EU trade figures published in June found that Brexit had led to a 14 percent fall in UK exports to the EU in 2021 compared to 2020.

Maroš Šefčovič, the European Commission vice-president and Brexit negotiator, said that  an increase in red tape since the transition period ended in January 2021 has taken its toll on trade in goods and services with the UK, even with the impact of the pandemic being taken into account.

“One result of Brexit was the return of a customs border between the EU and Great Britain. This means paperwork for virtually every product shipping between our markets. It means checks on thousands of goods being carried out on a daily basis.

“Brexit has increased red tape, not decreased it. It is no longer as frictionless and dynamic as before. This holds true for both goods and services,” said Šefčovič.

Gabrielle Pickard-Whitehead is a contributing editor to Left Foot Forward

Image credit: Pixabay – Bru-No

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