Statistics on UK-EU Trade from the House of Commons Library

UK Trade with the EU

UK Trade with the EU

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Contents
1. UK Trade in 2017
1.1 UK Trade Overview
1.2 UK Trade with individual EU countries
1.3 UK Trade in Goods
1.4 UK Trade in Services
2. UK Trade Recent Trends
2.1 The Rotterdam Effect
3. Trade between EU & Scotland, Wales, Northern Ireland & English Regions
3.1 UK Regions Exports
3.2 UK Regions Imports
4. EU’s WTO Tariffs
5. Appendix, UK Trade with Individual EU countries, 2017
6. Appendix: UK Trade with EU and Non-EU countries, 1999-2017

UK Trade with the European Union: Summary

UK Trade in Goods and Services with EU and USA Compared, 2017

UK Trade in Goods and Services with EU and USA Compared, 2017

UK Trade in Goods and Services with EU and USA Compared, 2017

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Taken as a bloc, the EU is the UK’s largest trading partner.

In 2017 the EU accounted for 44% of UK exports and 53% imports.

Looking at individual countries, the USA is the UK’s largest trading partner, accounting for just under a fifth of UK exports and just over 10% of imports in 2017.

UK Trade with the EU, 2017 (£ billions)

UK Trade with the EU, 2017

UK Trade with the EU, 2017

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In 2017, the UK recorded an overall trade deficit with the EU of -£67 billion.

A surplus of £28 billion on trade in services was outweighed by a deficit of -£95 billion on trade in goods.

The UK recorded an overall trade surplus with non-EU countries – a surplus in trade in services outweighed a deficit in trade in goods.

Share of UK Trade with the EU, 1999-2017 (% Total Trade)

Share of UK Trade with the EU, 1999-2017

Share of UK Trade with the EU, 1999-2017

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The share of UK exports accounted for by the EU has generally fallen over time.

In 2002, UK exports to the EU accounted for 55% of all exports; this had fallen to 43% in 2016.

The share of all UK imports accounted for by the EU fell from a high of 58% in 2002 to a low of 51% in 2011.

1. UK Trade in 2017

1.1 UK Trade Overview

In 2017:

• The UK exported £274 billion of goods and services to other EU member states. This is equivalent to 44.5% of total UK exports.

• The UK exported £342 billion of goods and services to non-EU countries. This is equivalent to 55.5% of total UK exports.

• Goods and services imports from the EU were worth £342 billion (55.5% of the total) in 2017.

• Goods and services imports from non-EU were worth £301 billion (46.9% of the total) in 2017.

• The UK had a trade deficit of -£67 billion with the EU but a surplus of £41 billion with non-EU countries.

• The UK recorded a deficit in goods with both the EU and non-EU countries, but a trade surplus in services with both the EU and non-EU countries.

• The EU accounted for 48% of UK goods exports and 40% of services exports; 54% of imported goods and 49% of imported services were imported from the EU.(1)

UK Trade with EU and Non-EU Countries 2017

UK Trade with EU and Non-EU Countries 2017

UK Trade with EU and Non-EU Countries 2017

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Source: ONS, Pink Book

UK Trade in Goods and Services with EU and Non-EU Countries, 2017

UK Trade in Goods and Services with EU and Non-EU Countries, 2017

UK Trade in Goods and Services with EU and Non-EU Countries, 2017

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Source: ONS, Pink Book

1 All data calculated from the ONS Pink Book 2018, section 9, Geographical breakdown of the current account, Table 9.3, July 2018

1.2 UK Trade Trade with individual EU Countries

The graph below shows UK trade with each of the other 27 EU member states.

In 2017:

• The UK had a trade deficit with 17 of these countries, a surplus with 4 and was broadly in balance with 5.

• The UK’s largest EU trade surplus was with Ireland (£12 billion) while its largest deficit was with Germany (£21 billion).

The Appendix at the end of this note shows data on UK trade with individual EU member states in 2017.

UK Trade Surplus/Deficit with EU Member States, 2017

UK Trade Surplus/Deficit with EU Member States, 2017

UK Trade Surplus/Deficit with EU Member States, 2017

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Source: ONS

The Appendix at the end of this note shows data on UK trade with individual EU member states in 2017

1.3 UK Trade in Goods

In 2017, road vehicles were the UK’s single largest export to the EU, valued at £18 billion, 11% of all UK goods exports to the EU and 45% of all UK exports of road vehicles.

Other British goods exports to the EU included petroleum and petroleum products, valued at £15 billion (9% of goods exports to the EU) and medicinal and pharmaceutical products valued at £13 billion (8% of all goods exports to the EU).

UK Goods Exports to the EU, 2017

UK Goods Exports to the EU, 2017

UK Goods Exports to the EU, 2017

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Source: HMRC, UK Trade Info

In 2017, road vehicles were also the UK’s single largest import from the EU, valued at £47 billion, 18% of all UK goods imports from the EU and 83% of all UK imports of road vehicles.

Other British goods imports from the EU included medicinal and pharmaceutical products, valued at £20 billion (8% of goods imports from the EU) and electrical machinery and appliances valued at £20 billion (8% of all goods exports from the EU).

UK Goods Imports from the EU, 2017

UK Goods Imports from the EU, 2017

UK Goods Imports from the EU, 2017

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Source: HMRC, UK Trade Info

1.4 UK Trade in Services

In 2017, the UK’s single largest service export to the EU was “other business services”, valued at £31.0 billion; this represented 28% of all UK service exports to the EU. This category includes legal, accounting, advertising, research and development, architectural, engineering and other professional and technical services. Other British service exports to the EU included financial services, valued at £26 billion (24% of service exports to the EU). Combined, these two categories made up just over half of all UK service exports to the EU.

UK Service Exports to the EU, 2017

UK Service Exports to the EU, 2017

UK Service Exports to the EU, 2017

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Source: ONS, Pink Book

In 2017, the UK’s single largest service import from the EU was travel services, which made up over 40% of UK service imports from the EU.

Travel services include services provided by hotels and restaurants, travel agencies and tour operators and will include services consumed by a resident of one country in another – a British tourist staying in a hotel in an EU member state will count as a British service import; a tourist from the EU staying in a British hotel would count as a UK service export.

UK Service Imports from the EU, 2017

UK Service Imports from the EU, 2017

UK Service Imports from the EU, 2017

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Source: ONS, Pink Book

The share of UK exports going to the EU has declined gradually in recent years:

• In 2006, the EU accounted for 55% of all UK exports. By 2016, this had fallen to 43%, before increasing slightly to 44% in 2017.

• The picture on imports is slightly less clear. In 2002, 58% of UK imports were from the EU. By 2010, this had fallen to 51% but has increased slightly more recently, reaching 54% in 2016.

Share of UK Trade in Goods and Services with the EU, 1999-2017

Share of UK Trade in Goods and Services with the EU, 1999-2017

Share of UK Trade in Goods and Services with the EU, 1999-2017

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Source: ONS, Pink Book

The fall in UK exports to the EU is more pronounced in goods than in services:

• In 1999, 61% of all UK goods exports were to the EU; by 2017 this had fallen to 48%.

• The EU has accounted for a consistent share of UK service exports– this has remained at around 40% since 1999. Trends in trade in imports have been mixed:

• The proportion of UK goods imports being sourced from the EU has remained fairly consistent since 1999.

• In general, the proportion of service imports being sourced from the EU has fallen since 1999, from a high of 57% in 2003 to 49% in 2017.

Overall, the UK has had a trade deficit with the EU in every year since 1999. By contrast, the UK has had a surplus with non-EU countries since 2012.

The Appendix at the end of this note shows a time series of data on UK trade with the EU.

Balance of Trade with EU and Non-EU Countries, 1999-2017

Balance of Trade with EU and Non-EU Countries, 1999-2017

Balance of Trade with EU and Non-EU Countries, 1999-2017

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Source: ONS, Pink Book

2.1 The Rotterdam Effect

All of these figures do not account for what is known as the Rotterdam effect – this is the theory that the UK’s trade with the Netherlands is artificially inflated owing to goods being dispatched to or arriving from the port of Rotterdam, even if the original source or eventual destination country is elsewhere.

This will also have a potential knock-on effect, as some trade recorded with the Netherlands, and thus the EU, may ultimately be with non-EU countries.

The scale of this effect is not known – a 2015 ONS article on the subject states:

There are legitimate, proven reasons as to why trade with the Netherlands is high, even relative to its population. It is also reasonable to assume that trade with the Netherlands suffers from an element of distortion. However, it is not possible to estimate, with any certainty, the impact that the Rotterdam effect has on UK Trade with the Netherlands and its subsequent impact on UK Trade with EU and non-EU countries.(2)

Even if a high proportion of recorded UK trade with the Netherlands is with non-EU countries, the EU remains the UK’s largest trading partner by a considerable margin.

2 ONS, UK Trade in Goods estimates and the ‘Rotterdam Effect’, 6 February 2015

3. Trade Between EU & Scotland, Wales, Northern Ireland & English Regions

HMRC publish data on trade with the EU for Scotland, Wales, Northern Ireland and the English regions. These figures are for trade in goods only – they do not include services.(3)

3.1 UK Regions Exports

60% of exports of goods from Wales go to the EU – this is the highest proportion of any country or region in the UK, followed by the North East at 59%.

Yorkshire and the Humber, Northern Ireland and the East of England also have relatively high shares of exports to the EU.

UK Goods Exports to the EU by Country and UK Region

UK Goods Exports to the EU by Country and UK Region

UK Goods Exports to the EU by Country and UK Region

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Source: HMRC, UK Trade Info

3 HMRC, Regional Trade Statistics

3.2 UK Regions Imports

66% of the East of England’s goods imports are from the EU as are 65% of Northern Ireland’s goods imports. The South East, West Midlands and North East also have relatively high levels of imports from the EU.

UK Goods Imports to the EU by Country and UK Region

UK Goods Imports to the EU by Country and UK Region

UK Goods Imports to the EU by Country and UK Region

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Source: HMRC, UK Trade Info

4. EU’s WTO Tariffs

While the UK is a member of the EU, there are no tariffs on trade with other EU member states. Goods imported into the EU from non-EU countries pay the EU’s common external tariff, unless there is a free trade agreement or preferential trade agreement.

The tariff rate differs between different goods. While on average EU tariffs are low, they are high for some products, especially agricultural products. The trade-weighted average EU tariff for non-agricultural products was 2.3% in 2014 and 8.5% for agricultural products.(4)

The table below gives a breakdown by type of product.

Average EU WTO Tariff by Product Type (%)

Average EU WTO Tariff by Product Type

Average EU WTO Tariff by Product Type

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4 WTO, World Tariff Profiles 2017, pg. 82

5. Appendix, UK Trade with Individual EU Countries, 2017

UK Trade with EU Member States, 2017

UK Trade with EU Member States, 2017

UK Trade with EU Member States, 2017

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Source: ONS Pink Book

6. Appendix: UK Trade with EU and Non-EU Countries, 1999-2017

UK Trade with the EU, 1999-2017

UK Trade with the EU, 1999-2017

UK Trade with the EU, 1999-2017

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Source: ONS series L84Y, L864, IKBH, IKBI, L86I

UK Trade with Non-EU Countries, 1999-2017

UK Trade with Non-EU Countries, 1999-2017

UK Trade with Non-EU Countries, 1999-2017

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Source: ONS series L84Z, L865, IKBH, IKBI, L86J

Derived from House of Commons Statistics on UK-EU Trade Paper 7851 Copyright: Open Government Licence v3.0

David Cameron Law
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: Studied Molecular Genetics BSc at Uni, 15+ years as an SEO consultant working with small to medium size businesses. 10+ years developing SEO software. Main Interests: Politics, Business, SEO, Web Development, Science, Nature .