Financial News

Brexit Briefing – How Much Trade Does Britain Have With The EU?

A major benefit of European Union membership is that Britain can freely trade with the other 27 countries in the bloc.

But while enjoying tariff-free trade with the rest of Europe, membership also means Britain cannot strike deals with partners outside the EU and must abide by European rules and regulations.

In 2016, trade with the EU accounted for 48% of exports from the UK, while imports were worth more than those from the rest of the world combined, according to the Office of National Statistics.

Motor vehicles and spares were Britain’s largest export, worth £18 billion.

The next largest export are chemicals, adding up to £15 billion.

Britain’s biggest trading partners

Financial services contribute £27 billion out of the £90 billion of services the UK exports to the EU.

Services accounted for 37% of UK exports to the EU in 2016, down from 40% in 2015.

The ONS points out that Germany is Britain’s largest trading partner, with £75 billion of imports and £49 billion of exports cro9ossing The Channel.

The US is the next largest trade destination with £99 billion of exports and £66 billion of imports going across the Atlantic Ocean.

In context, Britain received £318 billion of EU imports and £243 billion from the rest of the world, while exports totalled £284 billion to the rest of the world and £235 billion to the EU.

Trade surplus with 67 countries

“UK trade relationships are usually stronger with neighbouring countries, as well as countries with large economies. China and the US are large economies and important UK trading partners, even accounting for their distance from us,” says the ONS.

“However, distance is important. The value of the UK’s trading relationship with Ireland is higher than the value of UK trade with Italy or Spain, even though the total size of Ireland’s economy is much smaller than Italy’s or Spain’s.”

The ONS also points out that Britain has a trade deficit with the biggest EU economies, while a trade surplus is maintained with 67 countries, including the USA, Ireland, Switzerland, the United Arab Emirates, Saudi Arabia, Australia and Brazil.

“While the value of UK exports to the EU has fallen between 2011 and 2016 – from £243 billion to £236 billion, the UK is increasingly exporting to the US. Exports to the US rose by more than 26% over the same period,” says the ONS.

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