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Friday, July 01, 2022

No surprise as Brexit leads to fall in exports

The Guardian reports that evidence of the negative impact of Brexit on the UK’s trade with the European Union is starting to emerge with EU data showing that exports to the bloc declined by nearly 14% in 2021 compared with 2020.

The paper quotes Maroš Šefčovič, the European Commission vice-president and Brexit negotiator, who said that even with the impact of the pandemic being taken into account, the increase in red tape since the transition period ended in January 2021 has taken its toll on trade in goods and services with the UK:

“One result of Brexit was the return of a customs border between the EU and Great Britain. This means paperwork for virtually every product shipping between our markets. It means checks on thousands of goods being carried out on a daily basis.

“Brexit has increased red tape, not decreased it. It is no longer as frictionless and dynamic as before. This holds true for both goods and services,” he said.

The UK’s decision to choose a hard Brexit with the departure from the single market resulted in the loss of four freedoms to trade – in labour, capital, goods and services.

Eurostat figures put imports to the EU from the UK falling from €169bn (£144bn) in 2020 to €146bn in 2021 – a drop of 13.6%.

Eurostat figures show services, also impacted by Brexit, fell by 7% in 2021 compared with 2019. This category includes everything from financial services to professional services such as architecture, marketing and accounting.

The figures don't lie, and yet none of this is a surprise. It is entirely predictable that if you put up trade barriers, increase the amount of red tape and make it more difficult for goods to be sold abroad, then the economy will suffer. If we really are going to make Brexit work, as the government say, then they need to find ways around this.
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