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Home›Export›UK exports to EU fell by £20bn last year, new ONS data shows | Brexit

UK exports to EU fell by £20bn last year, new ONS data shows | Brexit

By Merry Smith
February 11, 2022
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UK goods exports to the EU have fallen by £20bn from the last period of stable trade with Europe, according to official figures marking the first full year since Brexit.

Figures released by the Office for National Statistics (ONS) on Friday showed the combined impact of the pandemic and Britain’s exit from the single market caused a 12% drop in exports between January and December of last year compared to 2018.

Highlighting the disproportionate impact of leaving the EU, exports to the rest of the world, excluding the 27-nation bloc, fell by £10bn, around 6% from 2018 levels .

The ONS compared business performance to figures from three years ago as it was the last year before distortions caused by stockpiling businesses ahead of Brexit deadlines and the spread of Covid-19.

Despite the disruptions, the EU remains the UK’s largest trading partner. However, for the first time since comparable records began in 1997, the UK is now spending more on importing goods from the rest of the world than from the EU.

For shipments in the other direction, UK goods imported from the EU were down almost 17%, or around £45bn, from 2018. By comparison, imports from the rest of the world were down. increased by almost 13%, or around £28 billion.

Charts: UK exports to the EU

With the EU accounting for just over half of Britain’s exports globally, economists said Brexit served as an additional headwind for Britain, adding to the disruption caused by Covid in advanced economies. “UK exporters continue to lose market share,” said Gabriella Dickens, an economist at consultancy Pantheon Macroeconomics.

Although trade levels have recovered in recent months, data from the Netherlands Bureau for Economic Policy Analysis shows that exports of real goods from advanced economies were 3.8% above their 2018 average in November, surpassing the United Kingdom.

The hardest hit commodities recorded dramatic falls. Outbound shipments of clothing and footwear to the EU are both down almost 60% compared to 2018. Exports of food and live animals – for which tighter border controls are required – have fallen by almost 18%, while vegetable exports fell by almost 40%. Car shipments to the EU, heavily disrupted by global supply chain issues and Covid, fell by a quarter.

Guillermo Larbalestier, a trade economist at the University of Sussex, said the decline in vegetable exports was likely linked to fewer seasonal workers available to pick and process crops, heavier paperwork and the difficulty exporting perishable goods in the face of long delays at the border.

Clothing exports have been hit as a high proportion of clothing sold by UK retailers is made in Asia or the US, making them ineligible for tariffs negotiated under the post-Brexit trade deal.

Chart: UK imports

However, the latest figures suggest a recovery from the worst Brexit damage seen in January 2021, just after Britain left, when exports to the EU fell by 40%.

According to the latest figures, UK exports to the EU were around £200m higher in December 2021 than in the same month in 2018, but much of this increase was due to higher prices wholesale gas on international energy markets.

Business leaders have warned that border restrictions and reams of red tape have driven up costs and lengthened delivery times, permanently undermining the competitiveness of British goods on the Continent.

According to ONS surveys, 67% of businesses encountered a problem when exporting and 72% when importing in the last month.

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“There’s a lot more friction on trade, which should have a medium to long-term impact,” said Grant Fitzner, chief economist at the ONS.

Gareth Thomas, the shadow minister for international trade, said the government had exaggerated the benefits of trade deals with countries outside the EU that have yet to be negotiated. “Ministers are not doing enough to support our exporters in markets outside Europe, as the deal they brokered with the EU has resulted in long queues of lorries at Dover, a sharp increase in bureaucracy and a significant drop in trade,” he said.

A UK government spokesperson said: “UK exports of goods to EU countries increased by 4% last year compared to 2020. However, as acknowledged by the ONS itself- Likewise, the impact of the Covid-19 pandemic, global recession and supply chain disruption have led to increased levels of volatility in recent statistics. It is therefore still too early to draw definitive conclusions on the long-term impacts of our new trade relationship with the EU.

“We continue to ensure businesses receive the support they need to trade effectively with Europe.”

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