“UK’s Decade-Long Exports Trail Behind All G7 Nations, Only Surpassed by Japan – A Harsh Reality.”

UK Exports Lag Behind G7 Members, Putting Pressure on Post-Brexit Trade Agreement with EU

Despite the world’s other major seven economies bouncing back following the pandemic, export growth in the UK has been sluggish. In fact, the country has had the worst exports record of any member of the G7 besides Japan over the last decade, according to a recent analysis by the United Nations Conference on Trade and Development (UNCTAD). This has led to increasing pressure on the government to reconsider its post-Brexit trade deal with the EU.

Comparing UK Exports with Other G7 Members

The value of the UK’s goods and services exports was £813bn in 2012 and rose by just 6% to £862.6bn by 2021, according to UNCTAD figures. In contrast, Canada saw a 10.2% export increase, France saw a 16.1% increase, Germany rose 22.7%, Italy increased by 15.9%, and the US saw a 13.8% rise. The EU’s 27 member states also saw a 29.1% increase in the value of their exports during the same period. The dip in the UK’s export numbers is particularly glaring when you consider that the value of UK exports in 2019 (before the pandemic) was £881.6bn – or around £20bn higher than the figure posted in 2021.

Japan saw the worst export results, as the value of its trade rose only 0.5% from £912.2bn in 2012 to £917.5bn in 2021. It’s worth noting, however, that this is partly due to a drop in demand from China as it has become increasing self-sufficient in goods such as cars, car parts, and steel.

UK’s Post-Brexit Export Challenges

The UK’s hybrid departure from the EU ended the frictionless trading that existed between EU countries. This has resulted in a series of post-Brexit obstacles to trading with the EU, leading to complaints from business leaders. Furthermore, UK businesses trading with the EU faced extra red tape and costs in the process.

Car Manufacturing Industry’s Concerns

The UK government faces increased obstacles in the car manufacturing industry. Three of the world’s largest carmakers – Vauxhall, Jaguar Land Rover, and Ford – recently urged the government to renegotiate with the EU to change post-Brexit rules due to come into effect next year, which they say could threaten UK electric vehicle production.

Shadow Trade Minister Response

The shadow trade minister Gareth Thomas pointed to the extra burdens on businesses exporting into Europe, which remains the country’s biggest market, as the reason for the disappointing growth in exports over the last decade. He also criticized the UK government for failing to deliver on key trade targets.

Export Volumes Forecast

In its most recent forecast, the Office for Budget Responsibility expects the weakness in UK overall trade to persist for the next two years, with export volumes forecast to fall by 6.6% in 2023 and by 0.3% in 2024.

Government Response

Despite the worrying numbers, a spokesperson for the Department for Business and Trade did not provide an explanation for the comparatively poor performance over the last decade. However, the government did point out that exports were up year on year, citing a figure from the Office of National Statistics. Furthermore, it was noted that healthy export results in services, such as finance, showed promise because trade in services is less dependent on the EU than in goods.

The government spokesperson stated: “In the 12 months to March 2023 the value of UK exports were up 24% in current prices and services exports reached a record high of £415bn. It’s clear that appetite for world-class UK goods and services continues to grow globally, and we’ll keep supporting these fantastic businesses in their exporting journey, helping to create more jobs, pay higher wages, and grow the economy.”

Potential Repercussions for Post-Brexit Trade Agreement with EU

The disappointing export results could lead to increasing pressure on the British government to reconsider its post-Brexit trade deal with the EU. The trade and cooperation agreement, which the UK struck with the EU, is due for review in 2024. The potential repercussions of not improving exports could include economic instability, job losses, and a negative impact on the UK’s ongoing negotiations on free trade agreements with other countries.

Conclusion

With the UK facing a decrease in export volumes for the next two years, the government needs to rethink its approach to post-Brexit trade. As the car manufacturing industry faces continued challenges, and UK businesses trading with the EU face extra red tape and costs, trade deals will need to be restructured. Failure to do so could lead to long-term economic instability.

UK exports, particularly goods, have lagged behind those of its counterparts in the G7, with only Japan experiencing worse results. The country’s biggest market remains the EU, and the hybrid departure from the EU has resulted in many post-Brexit obstacles to trading with the EU. The time has come for the government to take a stronger stance on trade and ensure that exporting businesses receive the support they need to compete in the current market.