UK exports in last decade worse than any G7 country except Japan

UK exports in last decade worse than any G7 country except Japan

13 Jun    Finance News, News

Britain has endured the worst exports record of any member of the G7 besides Japan over the last decade, according to a new analysis that will raise pressure on the government to reconsider its post-Brexit trade deal with the EU.

As most of the world’s other major seven economies have rebounded from the pandemic, export growth has remained sluggish in the UK at a time when businesses trading with the EU faced extra red tape and costs as a result of the country leaving the bloc.

Figures from the United Nations Conference on Trade and Development (UNCTAD) show that the UK’s goods and services exports had a value of £813bn in 2012 and rose by just 6% to £862.6bn by 2021.

That compares with the double-digit increases enjoyed by Canada (10.2%), France (16.1%), Germany (22.7%), Italy (15.9%) and the US (13.8%). The EU’s 27 member states as a whole enjoyed a 29.1% increase in the value of their exports in the same period.

The value of UK exports in 2019, before the pandemic, was £881.6bn, around £20bn higher than the figure posted in 2021, according to an analysis of the UNCTAD figures provided by the House of Commons library.

Only Japan, which has been particularly exposed to a drop in demand from China as it has become increasingly self-sufficient in goods such as cars, car parts and steel, posted worse results than the UK, with the value of trade rising by just 0.5% from £912.2bn in 2012 to £917.5bn in 2021.

The trade and cooperation agreement the UK struck with the EU after years of wrangling is up for review in 2024. The Labour leader, Keir Starmer, has said that a government led by him would seek better terms of trade, although he has limited the scope of any changes by ruling out rejoining the single market or negotiating a new customs union.

There have been repeated complaints from business leaders about a range of post-Brexit obstacles to trading with the EU and the lack of effort by the UK government in seeking to address them.

Most recently, three of the world’s largest carmakers, Vauxhall, Jaguar Land Rover and Ford, told the government that it needed to renegotiate with the EU to change post-Brexit rules due to come in next year that they say threaten UK electric vehicle production.

In its most recent forecast, the Office for Budget Responsibility said it expected the weakness in UK overall trade to persist for the next two years, with export volumes forecast to fall by 6.6% in 2023 and by 0.3% in 2024.

The shadow trade minister Gareth Thomas said that the disappointing growth in exports over the last decade was a direct result of the extra burdens on businesses exporting into Europe, which remains the country’s biggest market.

He said: “In the last decade the Tories have failed to deliver on key trade targets, have cut support to businesses wanting to win new export contracts and have made trade with key allies more difficult.

A spokesperson for the Department for Business and Trade did not provide an explanation for the comparatively poor performance over the last decade but provided a figure from the Office of National Statistics to suggest that exports were up year on year.

The government also pointed to the more healthy export results in services, such as finance, where trade is less dependent on the EU than in goods. Around 36% of services exports are made into the bloc compared with 47% of goods exports.

A government spokesperson said: “In the 12 months to March 2023 the value of UK exports were up 24% in current prices and services exports reached a record high of £415bn.

“It’s clear that appetite for world-class UK goods and services continues to grow globally, and we’ll keep supporting these fantastic businesses in their exporting journey, helping to create more jobs, pay higher wages and grow the economy.”

See also  'Bloomberg Real Yield' (06/23/2023)

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