1 min read

A couple of charts on UK-EU trade

A couple of charts on UK-EU trade

Two charts to mull over in relation to Britain’s relationship with Europe.

First, note that in pure goods trade terms (and mostly when people talk about exports they tend to talk about goods), the EU is becoming less important to Britain. Back in 1998 about 60% of Britain’s goods exports went to EU28 countries. Today it’s less than half – about 47.8%.

The argument frequently employed by eurosceptics is that by yoking ourselves to Europe, somewhere which accounts for an ever diminishing share of global growth and an ever-diminishing share of our exports, we are taking the wrong path.

Then again, consider this chart showing you UK exports of services.

As you can see, although UK services exports have, overall, increased in recent years, the breakdown between EU and non-EU hasn’t changed all that much. Europe was never the most important destination for services, neither today nor a couple of decades ago.

Now, the big difference between services and goods is that there is no EU-wide single market for services – everything from finance and legal services to haircuts (if one could really export a haircut). Anyway, the point made by pro-EU groups is that we are now at the very point when the EU is creating a single market in services, and that if the UK stayed in the EU it could dramatically increase its exports of services.

Anyway, these two charts just underline the overarching point: there are no simple answers in this EU referendum debate.

PS I note that when both sides in the EU referendum debate refer to UK trade, they often imply that higher exports are naturally a good thing. That’s not always the case; indeed, it’s a slightly mercantilist view of the world.

Yes: Britain needs to export more, but nor are more imports per se a bad thing.

Comments

Sign in or become a Ed Conway member to join the conversation.
Just enter your email below to get a log in link.