EU facts behind the claims: exports

25 April 2016

“Given that the EU sells far more to us than we do to them, the remaining EU member states will seek a trade agreement with the UK that seeks to maintain the same level of free exchange of goods, services and capital as is the case today.” (Leave)

“Anyone arguing that they need us more than we need them should consider that half our goods exports go to the EU whereas on average just 5% of EU countries’ come to the UK.” (Remain)

As Remain campaigners claim, exports to other EU countries make up about half of goods exports, and about 44% of total exports.

But it is correct, as Leave campaigners argue, that the share of all exports that go to the EU has been falling, down from 55% in 2002

This does not mean their overall economic importance is declining. 

As a share of the economy as a whole there has been little change over the last decade.

EU exports were worth about 13% of the value of the British economy in 2014, just as they were ten years previously. Meanwhile, exports to non-EU countries have increased from around 12% to 16%.

And the absolute value of UK exports to other EU countries has been falling since 2011 only.

Hard to say what difference the Rotterdam effect makes, but doesn’t change the overall picture

It’s sometimes argued that these statistics overstate the proportion of UK exports that go to the EU, as a lot of goods pass through ports like Rotterdam before being shipped to a final destination outside the EU.

Both the Office for National Statistics and the government's review of our EU membership have concluded that it's hard to put a figure on this ‘Rotterdam effect’ or to establish whether it's a serious problem for the statistics.

The Rotterdam effect “does not alter the fact that the EU is the UK’s main trading partner”, as the House of Commons Library says.

An agreement on trade in services if the UK left the EU would be important

What would happen to trade if the UK leaves the EU depends on the trading and other economic arrangements made in negotiations after a vote to leave.

Leave campaigners are undoubtedly correct in claiming that it would be in the interests of the EU, at least economically, to conclude some form of free trade deal, especially for trade in goods.

But that does not mean it would happen. After all, economists generally think that free trade deals are in the interests of both countries, but that doesn’t mean they always come about.

In particular, there is no comparable cross-border single market for services anywhere in the world outside the EU, according to UK in a Changing Europe Fellow Angus Armstrong.

And since the UK runs a substantial trade surplus in services, whether there would be a free trade agreement in services is a key question.

Remain campaigners are also correct to say that a free trade deal is not the same as full access to the EU single market.

The UK’s bargaining power in post-Brexit negotiations

Who would have the most leverage in any such negotiations?

The UK currently runs a large trade deficit with the rest of the EU. We imported about £60 billion more than we exported in 2014. The deficit has averaged about £40 billion in the past decade.

Leave campaigners say this means that the rest of the EU need us more than we need them when it comes to trade.

But this isn’t necessarily the case. Trade benefits consumers in importing countries, who gain from access to cheaper and better-quality goods. So there can be benefits on both ends.

It is approximately correct to say that the UK is the EU’s largest “export partner”—at least when it comes to goods.

If the UK left the EU, the remaining EU would export more goods to the UK than anywhere else outside the bloc, if current shares remained similar.

This trade would be 16% of extra-EU goods exports, or around 3% of the value of the (remaining) EU economy.

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