The chart from World Trade Monitor makes the UK’s position clear, other major nations have recovered since Covid, we have not.
Thanks to adjustment efforts made by business, a notable fall at the end of the Brexit transition period was overcome. The EU remains our largest trading partner, although not at pre-Brexit levels.
There are short term anomalies, such as UK energy exports to the EU being at a record high. Our climate has been reasonable and well equipped ports mean that much of the liquified gas meant for Europe is routed through the UK.
Negative factors are also evident, with food exports to the EU down 18% on pre-pandemic times due to regulatory changes. Clothing exports are suffering more, with point of origin rules having an unwanted effect.
The difference is that without a change of approach, the negative factors could become permanent, so we need to try to prevent that.
The Protocol Effect
Having sympathy for the parties involved in the Northern Ireland Protocol discussions is understandable. A complex situation needs a solution they can all live with, so they can move forward together.
What will not help is taking a direction which makes overall UK-EU trade less viable, at a time when our economy needs to progress. This is unlikely to come from damaging trust with significant trading partners
The Irish Prime Minister described our government’s intention to unilaterally change the Protocol as economic vandalism. European Commission vice president Maros Sefcovic stated there was “No legal or political justification whatsoever”.
The Trading Position
With fresh Brexit roadblocks on the horizon, a few have suggested that companies should dust down their old no deal Brexit plans. Others point out how unhelpful a constantly changing situation is, when they are trying to plan.
The government’s own figures show that UK exports to the EU remain well below pre-Brexit levels. The Office For Budget Responsibility have increased their 2020 forecast for the reduction in GDP due to Brexit.
A few improvements are being seen in trade elsewhere but moderate in comparison to losses on EU trade. Most “new” trade deals are rollovers of those we had through the EU, freshly negotiated deals are small in number.
Whatever your views on the political aspects of Brexit, there is little doubt that trade has lessened and needs a helping hand.
The number of ATA carnets for the EU we issue and the positive attitude behind them convinces us that the business will is there. With odd exceptions, a wish to continue trading with the UK is equally strong in the EU.
In our Control
Nobody can pretend that additional admin and cost make trade easier, or that some sectors will struggle in the new environment. This does not mean that opportunities for trade with the EU have vanished.
Support companies like ours, Chambers and other business organisations can testify to the continuing level of activity. Perhaps 15% of UK to EU trade has been lost but this means 85% has not.
There will be contracts to be renewed, renegotiation due to changing times, yet most business can be retained. With the right approach more can be achieved, a degree of regrowth we would all welcome.
Pragmatic support will be required from government, to eliminate identifiable barriers. That apart, the approach of UK business will determine future success and our relationship with European partners can still be at the heart of this.