April 19, 2021

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UK trade with EU takes sharp tumble after Brexit transition period

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UK exports to the EU were down 38 percent in January 2021.

Britain’s trade with the EU crumbled by more than a third in the first month of 2021 following the end of the Brexit transition period, according to new Office for National Statistics data.

The data shows smaller falls in trade with non-EU countries, indicating the early signs of Brexit’s impact on the U.K.’s trade position.  

Britain’s goods exports to the EU were down 38 percent in January compared to the same month in 2020. The U.K.’s goods imports from the EU fell by 16 percent.

This is consistent with the fact Britain has yet to impose import controls on goods, said Thomas Sampson, an associate professor of economics at the London School of Economics.  

In comparison, Britain’s export of goods to non-EU countries was dented by 8 percent in January, with its imports from non-EU countries falling 9 percent. Total U.K. exports fell 25 percent and imports 20 percent in that month.

The largest fall in U.K. goods exports to the EU hit the food and live animals sector, dropping by more than half at 54 percent. The hit was unsurprising, said Sampson, as those sectors faced full sanitary and phytosanitary checks at the EU border and some products are now restricted.

Sampson said the January declines could be partly driven by stockpiling of goods ahead of the end of the Brexit transition.

“This data is a sign of the strain UK firms are currently facing,” said Ana Boata, head of macroeconomic research at trade credit insurer Euler Hermes. “While some of the non-tariff barriers to trade, such as the increase in red tape and form-filling, will be ironed out in the short term, the combination of COVID-19 and Brexit will ultimately prove to be a long-term drag on growth.”

Source: POLITICO https://www.politico.eu/article/uk-trade-with-eu-takes-sharp-tumble-after-brexit-transition-period/?utm_source=RSS_Feed&utm_medium=RSS&utm_campaign=RSS_Syndication

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