UK doing more goods trade with non-EU states that with EU after Brexit and Covid economic slump

EU-UK goods trade has been battered by Brexit and the Covid pandemic to the point where it has been overtaken by trade with non-EU member states, official statistics showed today.

The Office for National Statistics found that imports and exports with the bloc fell 23.1 per cent in the first quarter of 2021, compared with the same time in 2018. 

In contrast trade with non-EU states fell by just 0.8 per cent in the same period, chosen because 2018 was the last time trade was unaffected by either Brexit negotiations turmoil or the global health crisis.

The data released by the ONS today shows a clear relationship between trade slumps and the two major events, with a marked cliff-edge for EU trade after the UK left in January. 

The severance led to major problems at the main ports of Dover and Calais as both sides tried to get to grips with the new arrangements. 

UK/EU goods trade fell by 20.3 per cent between the last quarter of 2020 and the first quarter of this year, the ONS said.

This was either side of the end of transition but also in a period when the UK was in the third lockdown. 

Trade with Ireland was the largest victim, the ONS said. The value of exports fell by £1billion – or 47.3 per cent – between December 2020 and January 2021 before recovering.

The ONS said its Business Impacts of Covid Survey (BICS) found that ‘of currently trading businesses that have reported challenges at the end of February 2021, the largest proportion of businesses’ reported main cause of challenge was the end of the EU transition period’. 

‘This has risen from mid-December 2020. In contrast, those reporting the coronavirus as their main challenge fell over the same period,’ it added.

‘While this evidence does not provide a causal link between the end of the EU transition period and the decrease in total trade observed in the first quarter of 2021, it does provide insight into whether traders are experiencing more challenge with the coronavirus or the end of the transition period, and how these have changed over time.’

The report also noted: ‘The continued global impact of the coronavirus (COVID-19) pandemic, combined with uncertainty surrounding the effect of EU exit have contributed to increased volatility in UK trade in goods across 2020 and into early 2021. 

‘It is difficult to fully detangle the impact the coronavirus and EU exit had on UK and international trade while they are still having an influence. 

‘We therefore compare with 2018 data for longer-term comparisons as the most recent period in which relatively stable trade patterns were observed.’