(Image source: UK Parliament)
Business and trade secretary, Kemi Badenoch, launched the government’s International Trade Week today (6 November), touting Brexit opportunities for businesses.
Posting on LinkedIn on the eve of the progamme of events, Badenoch celebrated the “record-breaking” number of attendees this year, with 2,500 businesses and 25,000 traders signed up to the week’s 180 events, aimed at helping UK businesses trade internationally.
She referred to a recent report by the Institute of Economic Affairs (IEA), which claims UK-EU trading relations haven’t been negatively impacted by Brexit.
Reflecting on the research she said that “we should stop talking ourselves down, and instead talk ourselves up.”
“Contrary to some media reports and many pre-Brexit establishment voices, the data says Brexit has not had a major impact on UK–EU trade.”
IEA report
The report challenged the idea that Brexit has hindered trading relations between the UK and EU, stating that trade of goods and services has enjoyed similar increases to those of non-EU nations.
It found that between 2019 and 2022 UK goods exports to the EU rose 13.5%, compared to 14.3% for the rest of the world. Services exports from the UK increased by 14.8%.
Speaking to the Telegraph, she said that “the vast majority of UK and EU trade is conducted by multinational companies who manage to sell goods all over the world without baulking at the paperwork”.
The report also considers the difficulties faced by SMEs, for which additional administrative time and costs represent a greater burden. It states that “the UK’s new digital customs platform” should minimise these costs and claims that prior to Brexit “these costs were borne by the whole population in the form of the UK’s EU membership payments”.
OBR
The IEA report criticised the Office for Budget Responsibility (OBR), which it states has perpetuated a “false narrative” about the impact of Brexit on the UK economy.
Considering two claims made in OBR’s 2023 Brexit analysis – that the UK’s GDP would shrink by about 4% long-term wand that trade would be 15% lower, compared with remaining in the EU – the IEA found that neither were supported by trade data.
Counter-point
However Jonathan Portes, professor of economics at King's College London, criticised the report’s conclusions.
He said that the report used a comparison between post-Brexit trade growth in current prices with pre-Brexit trade in inflation-adjusted prices to suggest that trade had grown faster post-Brexit, which he argued was not the case.
Portes added it was “very clear that there has been a significant deterioration in UK export performance”.
