£44 bn in lost trade in 1st 7 months of EU-UK trade deal: Analysis

The reduction in trade brought about an estimated combined hit to the UK economy of around £44 billion with £32.5 billion lost in potential imports to the United Kingdom and £11 billion in exports to the EU, according to the analysis produced for the episode of Channel 4 Dispatches that was aired on November 15.

TCA’s impact was felt even more strongly in the services sector, leading to 12 per cent drop in exports and a 37 per cent reduction in imports over the first two quarters of the year, the analysis revealed.

The researchers warned that while some of the trade hit, notably among UK exports to the EU, could be accounted for in teething transition problems at the start of the year, the loss of EU imports into the EU persisted at the same rate in the second quarter of the year suggesting it would remain an ongoing issue, a press release from the university said.

Michael Gasiorek, UKTPO director and professor of economics at the university’s business school, said: “The immediate impact on UK trade for firms and for consumers has been sharp and in many cases severe. In the longer-term, this will affect UK jobs and investment, and the challenges will be harder for small and medium sized enterprises to overcome.”

The UKTPO research also found that tariffs were still being applied on a quarter UK preferential exports to the EU covered by the free trade agreement, as UK firms continued to struggle with the complexity, the cost of paperwork and the detail of requirements needed to meet the conditions of rules of origin needed for zero-tariff.

Overall, UK exports to the EU worth between £7.89 billion and £10.56 billion incurred tariffs in the first seven months of the new trading conditions. Tariffs on some agricultural products can be over 50 per cent while for many items of textiles and clothing the tariffs are set at 12 per cent or 16 per cent.

The impact on UK exports varied considerably among different sectors in the first six months of the year, the analysis showed. The worst hit-sectors, plagued by persistent and lingering losses included footwear & headgear (77.2 per cent) and textile & clothing (minus 60.2 per cent).

ALCHEMPro News Desk (DS)