According to a recent study, trade between the UK and the EU is down 16% from what was expected had Brexit not occurred.
In the meantime, research from the Economic and Social Research Institute released on Wednesday shows that trade between the EU and the UK has decreased even more, by 20%, in comparison to a scenario in which Brexit had not occurred.
Using data from the UK and the EU, it was discovered that different data sources and comparison groups can produce different results when estimating the effect of Brexit on UK-EU trade.
When compared to UK trade with the rest of the world, where exports from Britain had been expanding slowly, the impact of Brexit on EU-UK trade does not appear to be as significant. However, a clear contrast emerged between the UK’s commerce with the rest of the world and the EU’s faster-growing performance with more than 200 trading partners.
The investigation discovered “a large fall in the quantity of products traded from the UK to the EU” based on monthly HMRC and country-level Eurostat data.
The ESRI said that the EU-UK goods trade rebounded after a steep decline in the first few 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 had followed the same growth rate as other trade partners.
The ESRI noted that global exports of goods from the UK have been growing slowly – a trend it said may have been partly the result of “Brexit spill-over” effects on supply chains. It said for most countries across the EU, the size of the impact of Brexit was broadly similar for both exports and imports.
Peter Norris, the Virgin group chair and co-convener of the Brexit monitoring group, the UK Trade and Business Commission, said “recovering lost trade with Europe should be a top priority” as the country enters a recession.
He continued, “The government can achieve this by reducing the trade barriers that Brexit introduced.
According to the ESRI, Ireland stands out as having experienced a particularly significant decrease in imports from the UK compared to its other international trading patterns.
There has been no discernible effect of Brexit on the overall volumes of trade to yet, while exports from Ireland to the UK continue to perform in line with those of other markets.
The increased trade between Ireland and Northern Ireland, according to researchers, may be to blame.
The ESRI accepted that some product types may have suffered a reduction in exports to the UK, but the study did not explore whether there was variance among product kinds. Additionally, the study did not look at the services industry.
