Has Brexit Finally Caused A Stir In UK-EU Trade?
There are considerable difficulties in assessing the overall economic effect of Brexit to both the UK and EU. However, they have already seen the first impact in the form of trade disruption.
The year began with a negative impact on the Anglo-French trade volumes, where French exports to the UK fell by 13%. On the other hand the French imports from the UK saw a decrease of 20%. The French customs office cited Brexit as the reason for such a disruption in trade. Contrary to Anglo-French, French exports and imports from other states saw a rise earlier this year as opposed to late last year.
It is interesting to note that last year Anglo-French trade had recuperated from the effects of the pandemic. This showed an increase for the second subsequent year. The trade was boosted by businesses storing before the UK abandoned he EU single market.
However, the latest French statistics depicts that the technical barriers and insecurity Brexit created have caused a sudden shock UK-EU commercial activity. Until the Brexit the EUP was UK’s biggest trading ally.
The EU and UK agreed on a last-minute trade deal as a last resort to avoid duties on most goods. Nonetheless, factors such as transportation delays, higher shipping costs, and many other complex border requirements caused a disruption in trade.
The trade between Britain and Germany was also disrupted, where German exports to Britain decreased by approximately 30%. But the German-Britain trade has been seeing a declining trend ever since the Brexit referendum that took place in 2016.
Italy on the other hand recently revealed a year by year drop of 38% in its exports to the UK. The drop in British imports was calculated at 70%. These figures reflect a much sharper decline in comparison to other countries.
The UK is also gradually deteriorating as a trading partner for the rest of the Union. According to Eurostat, UK’s overall exports from the EU have dropped to 14% from 17% since the EU referendum in 2016.
However, economists believe that Brexit alone is not the reason for these declines, the pandemic is equally to be responsible. The coronavirus pandemic was a terrible blow to the global economy as a whole. It is thus uncertain as to how much of the declines the Brexit and the pandemic, respectively are responsible for.
Before UK left the EU, there were debates that the exit will open a pandora’s box. With Brexit the Union will have to make internal changes to its institution. The UK and EU companies had already started preparations for the trade disruption Brexit would cause. The disruption is finally coming to the forefront, albeit not clear what caused it more – the pandemic or Brexit.