Brexit Britain bounces back with rising non-EU trade as new deals on way

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The value of total UK global trade reached nearly £1.27 trillion in 2021, rising 4.9 percent on the previous 12 months. According to the Department for International Trade’s latest trade in numbers snapshot UK exports rose 2.3 percent while imports were up 7.5 percent for the year. Since the 2016 Brexit referendum trade had been growing steadily with exports rising from a value of £569.1 billion in 2016 to £699.3 billion in 2019. Imports meanwhile rose from 602.1 billion to 719.9 billion over the same time.

Both imports and exports took a major knock in 2020 as the pandemic shut down large parts of the economy and saw global supply chains severely disrupted in its wake.

Cornelius Clarke, Head of Desk at financial services firm Ebury, explained the Brexit transition period and global supply bottlenecks had changed the “regular trading patterns” of many UK businesses.

As global trade by the UK takes off again non-EU countries in particular have helped drive growth with non-EU imports rising 15.3 percent while EU imports saw a decline of -2.7 percent.

China has emerged as a major trading partner with 10.6 percent of goods and services coming from the country, worth £68.5 billion.

Mr Clarke commented: “Imports from China are growing with goods imports reaching an all-time high in 2021 despite the rise in shipping costs indicating that UK businesses are already diversifying their supply chains.

“The ongoing free-trade negotiations with India could also present a significant opportunity for UK business too in lowering costs and barriers to trade with a rapidly growing global economic superpower.”

For both imports and exports the US remains by far the UK’s biggest source of trade with 12.3 percent of imports and a massive 21.4 percent of exports flowing between the two.

For the last year cars proved the UK’s top goods export at a value of £23.6 billion, closely followed by mechanical power generators and medical and pharmaceutical products.

Despite being impacted by a global shortage of semiconductors Britain’s car industry has begun 2022 on a solid footing with new registrations up 27.5 percent.

For service exports business and financial services dominate, worth over £180 billion combined.

Since leaving the EU the UK has been in the process of seeking out new trade deals and pivoting more towards Asia particularly.

In a major boost to global trade today the Government revealed the UK was moving into the second and final phase of joining the £8.4 trillion Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

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If accepted, the UK would be the first European country to join the group of Pacific rim nations including Australia, Japan, Taiwan and Canada.

The UK is also in the process of negotiating a trade deal with India which the Government believes could double exports to the country.

While the US remains a major trading partner hopes for a wide ranging deal have been dashed following comments from President Joe Biden suggesting it wasn’t a priority.

Instead the UK is looking to do a series of mini deals with individual states such as California which alone has an economy larger than that of France.

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