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Summary
- The UK’s goods trade with EU nations posted a drop of 23 per cent in the first quarter of the year.
- Exports to Ireland suffered severe hit showing the disruption of Brexit.
- Trade with non-EU countries dropped by just 0.8 per cent over the same period.
The UK’s goods trade with EU nations recorded a sharp drop of 23 per cent in the first quarter of the year, and exports to Ireland suffered the worst hit due to disruptions related Brexit. China became the biggest single import market, replacing Germany, according to data from the Office for National Statistics (ONS).
Trade with non-EU countries dropped by just 0.8 per cent over the same period. The figures reflect how trade has been impacted by new border checks on exports to the EU as part of the Brexit deal struck between Brussels and the UK government.
The ONS compared the data with 2018 as that was the last when the UK saw comparatively stable trade patterns. But exports to Ireland recorded the sharpest decline compared to other UK trading partners. Exports to Ireland decreased by £1 billion or 47.3 per cent between December and January. Imports from Ireland decreased by 4.4 per cent to £100 million. In December, total exports were higher by 21.1 per cent than in the same month a year ago. Chemical exports to Ireland in December had risen by 33.5 per cent to £600 million, compared with the year before, and in January it fell to £100 million.
Also read: Why the UK Exports to EU Fell by Record 41% In January
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As businesses prepared for trade complications, stockpiling of food and chemicals might have happened in Ireland in the months before the end of the transition period.
Half a year post transitional arrangements with the EU coming to an end, the ONS said in a report on the impact of the Brexit and pandemic on trade that disruption took place at the beginning of the new trading relationship. Activities dropped around ports, and UK businessmen have been struggling with new paperwork.
A report by the Business Insights and Conditions Survey shows that of businesses that have exported in the last year, as high as 38 per cent reported that extra paperwork had been a challenge in conducting business since February this year, and it has been stable through to April.
Brexit was the most common challenge for businesses till the end of February, which was a jump from mid-December 2020. However, those who reported coronavirus as a challenge fell in the same period.
China had overtaken Germany as UK’s biggest import market last year for the first time as the spread of the pandemic lifted demand for textiles from China that is used for PPE and face masks.
Also read: UK CPI inflation jumps to 0.7% in March 2021, says ONS
Imports also were boosted by the demand for Chinese electrical goods picking up during lockdown, as well as because China was the only big economy to have recovered from the economic fallout of the pandemic.
The ONS data also showed that total trade from non-EU countries was higher than those from EU nations in the first quarter of this year.
Total trade with EU nations fell by 23.1 per cent, and with non-EU nations fell by 0.8 per cent in the first quarter of 2021 compared to the same period in 2018.
