In 2021, Great Britain left the EU customs union and the single market. This has serious consequences for the domestic economy. Some sectors are significantly more affected than others.
According to a recent study, British foreign trade with the EU is suffering more and more as a result of Brexit. Imports and exports have fallen sharply, according to the report by Aston University in Birmingham.
Between 2021 and 2023 – the years immediately following Britain’s exit from the EU customs union and the single market – the value of British exports of goods to the EU fell by 27 percent and the value of imports by 32 percent.
In addition, the diversity of British export goods has declined: in every EU country, 1,645 fewer types of British products were exported. This hit smaller EU economies harder than larger ones like Germany.
The study does not take into account the services sector, which has performed better than expected since Brexit. Exports of tobacco, rail and aircraft goods have also increased.
Great Britain left the EU at the end of January 2020 and has not been a member of the EU customs union or the single market since 2021. Despite a last-minute free trade agreement, bureaucratic hurdles and other barriers to trade remain.
According to the study, the sectors most affected include agriculture, clothing, and wood and paper production. The largest decline in exports was in edible fruits and nuts, whose value fell by almost three quarters (73.5 percent).
In 2023, trade fell even more
“The negative impact of the trade agreement has intensified over time, with 2023 showing a sharper decline in trade than previous years,” it says. Smaller British exporters in particular have given up trading with the EU.
The study authors stressed that political interventions are necessary. This includes mitigating the negative effects of the trade agreement, redesigning supply chains and helping companies adapt to trade barriers.
The new social democratic government in London wants to improve relations with the EU. Prime Minister Keir Starmer, however, strictly rejects rejoining the customs union or the single market. Offers from the EU for simpler Brexit rules for contacts between young people have also not been met with enthusiasm.
Source: Stern
