Slump in EU/UK trade points to Brexit impact, research suggests

David Young, PA

Trade from the UK to the EU is down 16 per cent on the levels anticipated if Brexit had not happened, research has found.

Trade from the EU to the UK is down even further – 20 per cent – relative to a scenario in which Brexit had not occurred, according to the Economic and Social Research Institute (ESRI).

The institute used the growth rates recorded by other EU trading partners around the world since the start of 2021 to estimate what UK export and import figures with the bloc would currently stand in a no-Brexit situation.

It did so on the assumption that UK trade would have grown at the same rate as those other international trade partners of the EU.

At the start of 2021, new post-Brexit trading arrangements came into operation after the transition period ended.

ESRI said the goods trade between the EU and UK has increased following a sharp fall in the early months of 2021.

Trade has recovered to most of its pre-2021 level in value terms, however, it remains significantly below what it might otherwise have been if it followed the same growth rate as other trade partners, the ESRI said.

The institute said its findings showed that measuring the impact of Brexit on UK-EU trade can produce varied results depending on the data source and comparison group used.

ESRI noted that global exports of goods from the UK have been growing slowly – a trend it said may have been partially the result of “Brexit spill-over” effects on supply chains.

It said the impact of Brexit on EU-UK trade, therefore, does not appear as large if compared to UK trade with the rest of the world as it does when compared to the faster-growing performance of EU trade.

The ESRI used a combined set of EU and UK data sources in its research.

The institute also looked at UK trade with individual member states, finding that Brexit has led to a significant decline in trade with the UK in almost all cases, although by varying magnitudes.

It said for most countries across the EU the size of the impact was broadly similar for both export and imports.

Ireland stands out as having had a particularly large reduction in imports from the UK relative to its other international trade patterns.

However, exports from Ireland to the UK continue to perform in line with those of other markets, with no notable impact to date of Brexit on the total levels traded.

The ESRI said the increased trade between the Republic and Northern Ireland may account for this.

The research does not examine if there is variation across product types and ESRI acknowledged that some may have seen exports to the UK decline, while the research also did not examine the services trade.