Trade data indicates below-par performance by UK

Mon 28 Nov 2022
Posted by: Richard Cree
Trade News

New data from Britain’s first post-Brexit trade agreement, with Japan, suggests it is underperforming compared to expectations. 

When the deal was signed, in October 2020, the then secretary of state for international trade, Liz Truss, claimed it would open up trade worth billions for British exporters.

But figures from the Department for International Trade (DIT) show exports to Japan fell from £12.3bn to £11.9bn in the year to June 2022. 

Exports in goods were down by 4.9% to £6.1bn and services fell 2% to £5.8bn, reports the Observer.

Oversold deal

Minako Morita-Jaeger, a policy research fellow of the UK Trade Policy Observatory who has analysed UK-Japan trade, said the UK-Japan trade agreement was “oversold” and did not offer significant economic advantages over the previous EU deal. 

“In all cases but one, Japanese exports and imports of goods and services with the UK performed worse than the equivalent flows with the EU or the rest of the world,” she said.

Japanese businesses have used the UK as a gateway to Europe since the 1980s and annual business research found that the top concern for companies was the UK leaving the EU – named by 73.7% of respondents in 2020 and 47.9% in 2021. 

OECD downplays UK

These figures come as the UK has been predicted to be the worst performer of the world’s major economies next year, apart from Russia.

OECD figures claim UK GDP will fall by 0.4% in 2023 before rising by just 0.2% the following year, reports the FT.

Figures produced by the Labour Party add to the picture of lagging British export growth among the G7 group of advanced economies.

UK exports grew 24% last year, compared to the total value of its goods and services exports in 2010. 

The G7 average was almost 28%, with Germany’s exports up by 35% on 2010, and the US’s up by 37%.

But, according to Politico, comparing the average change in export growth over the entire 12-year period of Conservative rule, the UK ranks alongside many of its allies, with an average growth of 3% between 2010 and 2021 being on a par with top performing G7 countries.

Business support

A spokesperson for the trade department said that UK exports reached £748bn in the last 12 months, up 21.5% year-on-year and nearly 7% more than in 2019.

Support is available for exporters, they added. “Our 12-point Export Strategy and new Export Academies give businesses the tools they need to sell to the world while our ambitious new trade deals open up even more opportunities to create jobs, boost higher wages and grow the economy.”

Starmer nixes Swiss deal

Labour leader Sir Keir Starmer, who was busy boosting his business credentials at the CBI conference last week, has ruled out a Swiss-style deal with the EU mooted by some observers, and said he would not accept the return of freedom of movement for EU citizens, reports the Mail

Sir Kier said he was keen to move on from the years of conflict with Brussels and that “ripping up the Brexit deal would lead to years more wrangling and arguing when we should be facing the future”. 

“Let’s get on with what the country wants – face the future, seize the opportunities Britain has and make Brexit work,” he said.