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Summary
- January-March 2021 became the first quarter in which UK’s non-EU imports were higher than imports from EU nations.
- Total imports were £14.5 billion or 12.3 per cent lower than the imports in the previous quarter.
- For the first three months of the year, trade with the EU fell by £18.4bn.
Since 1997, January-March 2021 became the first quarter in which UK’s non-EU imports were higher than imports from the group nations, government data showed.
According to the data from the Office for National Statistics (ONS), UK’s trade data for March 2021 showed that total imports (barring precious metal) were £14.5 billion or 12.3 per cent lower than the imports in the previous quarter. Imports from non-EU nations other than precious metals increased by 8.4 per cent or £1.5 billion in March, driven mainly by imports in clothing.
For the first three months of the year, trade with the EU fell by £18.4bn ($26bn). Exports to non-EU countries increased by £1.3 billion in March mainly because of exports of cars. Total exports of goods in the first quarter were £7.0 billion lower than the previous quarter.
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The total trade deficit in the first quarter, other than precious metals, narrowed to £1.4 billion from £8.4 billion. Trade-in import of services in the first quarter was 27.9 per cent or £13.4 billion lower than the previous quarter. Exports were £10.4 billion or 14 per cent lower.
According to the ONS data, total exports increased in March 2021 and trade with both EU and non-EU countries increased. Import of goods also increased, and expansion was across both EU and non-EU nations.
The UK’s exit from the EU block deprived it of the gains of a single market. Post Brexit trade was marked by systemic disruptions and supply chain issues, with businesses requesting the UK government to crease out the problems so that businesses could operate smoothly. A lot of sectors have had to take a hit because of failure to obtain an equivalence status.
Imports from the rest of the world replacing imports from EU thus assumes significance for UK’s trade. However, it could not be clearly ascertained whether the shift would be temporary or a permanent one.
Also read: Exports of Goods to The EU Recover in February From Sharp Fall of Previous Month
According to the ONS, due to the ongoing recession and the pandemic and with data available for only one quarter, it would be premature to establish whether it is a result of short-term trade disruptions or a longer-term supply chain adjustment.
Stockpiling could also be one of the reasons for the shift. As Brexit deadline approached, many businesses reserved goods at the end of last year out of disruption fears. This created lower import demand at the beginning of the year.
Experts said that disruptions following the abrupt UK-EU trade deal in January have eased, and exports to the EU have recovered and are now close to the level it was at by the end of last year. They said that imports are lagging but evidence of stockpiling in the last quarter of last year distorts the picture.
Experts have cautioned that the numbers are expected to become more complicated for various sectors after the UK government makes full customs requirements operational from late-2021 and early 2022.
