Trade in Goods

The share of imports and exports of the UK fell by 2% from the EU in the first half of 2021.

Uk total imports from the Eu increased by +7% YoY, from £94 Bn in H1/2020 to £101 Bn in 2021 H1. Despite this increase , EU’s share in the UK total imports fell.

Exports to the EU increased by +7 YoY, from £63 Bn in H1/2020 TO £68 Bn in 2021 H1. Despite this increase in value terms, the EU’s market share in UK exports fell by 2 percentage points.

The UK lost a quarter of it’s market share in EU imports in the first half of 2021 compared to the first half of 2020 (from 3.6% to 2.6%).

UK’s top Export sectors

The top five export sectors to the EU are Machinery, Chemicals, Vehicle, Minerals and precious stones.

Machinery remains the main exported sector, with £13 Bn of exports in 2021 H1.

Pearls & Diamond Exports

In H1/2021, Pearls & Diamonds joined the list of top 5 sectors of exports, gaining +5% share of UK exports and surpassing exports of base materials.

The export value was £7 Bn in 2021 H1, with an increase in exports mostly going to Hungary & Germany.

Trade in Services

7% of UK imports and 1% of UK exports shifted from the EU to the rest of the world in 2021 Q1.

Imports from the EU fell by 36%, from £14 Bn in 2020 Q1 to £9 Bn in 2021 Q1, a much greater fall than imports from the rest of the world.

Exports to the EU fell by 14%, from £19 Bn in 2020 Q1 to £16 Bn in 2021 Q1, a much greater fall than exports to the rest of the world.

Goods – Based on IEC forecasts, between 2021 to 2025, UK merchandise exports to the EU will contract by 10%, moving from £138 Bn to £120 Bn, whilst UK merchandise imports from the EU will remain stable

Services – Based on IEC forecasts, between 2021 to 2025, UK service exports to the EU will decrease by 3%, moving from £14.8 Bn to £14.3 Bn, whilst UK service imports from EU will decrease by 23%, moving from £13 Bn to £10 Bn.

Post BREXIT trade agreements

Since exiting the EU, the UK rolled out FTAs with 66 markets, lost preferences in 11 markets, gained preferential access to 2 new markets, and lowered preferential access to 27 markets*

 

Major sector changes in trade in goods and services with new FTA partners

Share of exports of Pearls and diamond increased by 13% to Japan and 13% to Australia in 2021 H1 as compared to 2020.

Share of service exports in the Insurance and Pension sector to Australia increased by 14% in 2021 Q1 as compared to 2020.

Share of service exports in transportation to Australia fell by 20% in the 2021 Q1 as compared to 2020

Share of imports of machinery goods increased by 9% from Japan and 3% from Australia in the 2021 H1 as compared to 2020.

Share of service imports in IP sector from Japan increased by 22% in 2021 Q1 as compared to 2020.

Share of service imports in finance sector from Australia fell by 7% in 2021 Q1 as compared to 2020

Note: Goods: First half year flows; Services: First quarter flows; Observations of shifts should not be attributed to the outcome from signing on FTA, which is too early to see any imapact.

Goods – Based on the forecast results, between 2021 to 2025, merchandise exports to new FTA partners (Japan & Australia) will increase by 5% moving from £10.6 Bn to £11 Bn, whilst merchandise imports from FTAs will increase by 3%, moving from £10.3 Bn to £10.6 Bn.

Services – Based on the forecast results, between 2021 to 2025, exports of services to new FTA partners (Japan & Australia) will increase by 9% moving from £1.11 Bn to £1.21 Bn, whilst imports of services from FTAs will increase by 4% moving from £1.9 Bn to £2.0 Bn.

*: Rolled over, means this is virtuallly no change on what the UK had as a member of the EU’s FTA arrangements. The FTA with the EU is less ambitious than EU membership. New agreements are those which have entered into force since BREXIT.

Source: IEC Calculations and forecasts; ITC; UNSD, ONS

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