Brexit has NOT damaged UK trade with the EU, report argues
Brexit has NOT damaged UK trade with the EU despite dire warnings from Remainers as exports of goods and services both continued to rise after the UK left the single market, report argues
- UK goods exports jumped by 13.5% to EU countries between 2019 and 2022
Brexit has not damaged the UK’s trade with the European Union despite dire warnings from Remainers, a report argues today.
Exports of goods and services have continued to rise since Britain left the EU, according to analysis by the Institute of Economic Affairs (IEA) think-tank.
Business Secretary Kemi Badenoch will today argue that this growth contradicts the ‘narrative that Brexit has severely damaged our economy’.
She is expected to say that the figures show Britain should ‘stop talking ourselves down, and instead talk ourselves up’.
After the Brexit vote in June 2016, many gloomy economists and Remainers suggested the move would harm UK businesses by making trade harder with companies on the Continent.
Business Secretary Kemi Badenoch will today argue that this growth contradicts the ‘narrative that Brexit has severely damaged our economy’
The Office for Budget Responsibility, the Government’s fiscal watchdog, predicted in 2021 that new barriers linked to Brexit would result in a 15 per cent drop in trade volumes, contributing to a 4 per cent hit to the economy in the long run.
It argued that this lower trade would be driven by stunted investment in Britain due to the uncertainty caused by Brexit.
But the IEA has now argued that the outlook is much brighter. UK goods exports jumped by 13.5 per cent to EU countries and 14.3 per cent to non-EU countries between 2019 and 2022, according to figures from the Office for National Statistics.
Over the same period, UK services exports – including professional services and labour – rose by 14.8 per cent to EU countries and 22.1 per cent to non-EU countries.
Pointing to these figures, economist Catherine McBride, author of the IEA report, said: ‘If Brexit were a major disrupter of UK trade, we could expect to see a divergence between UK trade with EU destinations and UK trade with non-EU destinations. This is not the case.’
This is largely thanks to the UK and EU’s tariff-free and quota-free trade deal. And while both EU and non-EU countries saw a large drop in trade in 2020 and 2021 because of Covid lockdowns and supply chain shortages, the UK has been able to recover from this.
Excluding precious metals from the trade figures, goods exports to the EU have outperformed exports to non-EU destinations substantially since Brexit, the IEA found.
This makes any claims that Brexit has harmed UK trade with the EU look ‘absurd’, Ms McBride argued.
She added: ‘While the data is still emerging and longer-term effects are as-yet unknowable, there has been no real disparity between UK trade with EU and non-EU countries.
Contrary to some reports and many pre-Brexit establishment voices, the data says Brexit has not had a major impact on UK–EU trade
‘Nor has there been a sharp fall in UK–EU trade either at the aggregate or sector level.’ The report argues that although Brexit could have some impact on the UK’s future level of trade with the EU, it has also presented opportunities with other nations.
In a speech at the launch of International Trade Week today, Mrs Badenoch is expected to say: ‘I just don’t agree with the narrative that Brexit has severely damaged our economy. Every major country has faced significant economic challenges over the last few years. We should stop talking ourselves down, and instead talk ourselves up.’
Contrary to some reports and many pre-Brexit establishment voices, the data says Brexit has not had a major impact on UK–EU trade. UK trade with EU countries has broadly moved in line with UK trade with non-EU countries.
The UK remains the second largest exporter of services in the G7 after the US, with its trade patterns compared with other G7 countries remaining unchanged since Brexit.
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