The Importance of EU Countries as Trading Partners

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The Importance of EU Countries as Trading Partners

The figures published by the Office of National Statistics (however unreliable they may be, they are the best we have) show that the EU bloc is our largest trading partner, importing from the UK goods and services worth about £228.893 bn in 2014 and exporting goods and services to us worth about £290.6034 bn. The UK therefore had a trade deficit with the rest of the EU in 2014 of about £61.74bn. The UK’s total exports in 2014 were worth about £515.191 bn. (ONS Pink Book 2015, Chapter 9)

Like nearly all figures supplied by government agencies (and not just in the UK), these statistics are open to question, not least due to the so-called Rotterdam Effect; goods sent from the UK to Rotterdam and other EU ports and airports may be destined for countries outside the EU.

The obvious question for ‘leave’ campaigners is whether our trade with the EU will continue at a similar level after Brexit and whether trade with other countries will be affected for better or worse. These are not easy questions to answer. Indeed, one might say they are unknowable. ‘Remain’ campaigners warn of the dangers of cutting ourselves off from our largest export market while ‘leave’ campaigners argue that EU countries would be acting against their own interests if they introduced trade barriers against the UK because of their trade surplus with us. I shall return to this idea later but Jonathan Portes of the National Institute of Economic and Social Research has made the point that the UK’s importance to the rest of the EU is far less important to them (approximately 3%) than to us (approximately 45%).http:///www.niesr.ac.uk/blog/after-brexit-how-important-would-uk-trade-be-eu#.V0A4wlfgBpB


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