Has Brexit ruined the UK's trade with EU countries? I've always been a bit skeptical of the horror stories, but for some reason most published analysis only goes through the end of 2021. Today I got curious enough to check out the figures on the UK trade site, which goes through August 2022. Here's the summary:
There's been a huge increase in non-EU imports of oil and gas, which obviously has nothing to do with Brexit. So let's zoom in on everything else:
There was a sharp decrease in EU imports when Brexit was finalized, but that was slowly being made up throughout 2021. Then there was an increase that might have been the result of a change in the way imports were counted, though the UK customs folks say it was probably real. In any case, by mid-year the growth of EU and non-EU imports had just about reached parity.
If these numbers are accurate, it looks like Brexit had a big short-term impact on EU imports that faded over time. The picture is basically the same for exports, though the impact is more muted.
I've never agreed with the Brexit doomsayers. I don't think it's a catastrophe, only that it's a huge waste of time that produced a bit of short-term pain but not much else. Plus there was the strong racial motivation for the whole thing, along with the endless lying about it, which certainly doesn't reflect well on Britain.¹ But I suppose they'll muddle through.
¹Not that we Americans are in much of position to criticize others for this.
I've never agreed with the Brexit doomsayers. I don't think it's a catastrophe
Agreed in terms of macro effects on the economy. The "disaster" is for individuals: giving up the right to live/work without any fuss anywhere from Lapland to the Azores sucks for millions of Britons.
Not super-surprising. Trade rules under the WTO regime between the UK and elsewhere (including the EU) are still pretty lenient, and the UK had a lot of time to manage Brexit more gradually because the EU brass had no desire to see them "crash out hard".
Nowhere as well as the proponents wanted nor as bad as the opponents predicted?
How about export from UK to EU? How much additional cost is involved for both exporters and importers?
Import/export? I am starting to sound like George on Seinfeld, so how does Brexit impact Vandelay Industries?
I need to read every comment first.
I'd like to see the trend line for UK imports from the EU prior to Jan 2021 (pre-Covid), when they drop 40% on your graph. Especially including the years prior to 2016, when the referendum happened.
They now seem to be 10% higher than Oct 2020, but how much higher would they have been if they'd followed the pre-Brexit trend?
I was looking at GDP levels--UK, France, Germany....
And along with Brexit has been a number of other issues going on...the market crash in 2008, the Eurozone Crisis...which dragged out into mid 2010's, the war in Syria and the refugee crisis, the pandemic, and now the war in Ukraine.
Brexit has caused a lot of problems, esp. for given individuals--but not a complete disaster...yet. Most of the burden of dealing with Ukrainian refugees falls on the EU, and the Russian invasion is hurting the EU economies probably more so than the UK's. Once that is done and the Ukrainian people move back, the EU will grow and the UK will fade.
Imports being one part of the equation, how about exports?
The report Kevin links to shows exports as well as imports, and he says that, "the picture is basically the same for exports, though the impact is more muted."
Note that the the data is for trade in goods. Services are excluded from the numbers, so they don't reflect the full impact of Brexit on trade.
Imports volume is one thing, how about the prices of those imports? Is it cheaper now? I mean lettuce is cheap anyway, but one must mind the pence.
This is usually the point where you highlight the efficiencies of Capitalism.
This is so gob-smackingly economically innumerate.... well I can see why Drum remains baffled by inflation.
"only that it's a huge waste of time that produced a bit of short-term pain but not much else. "
Utterly wrong. Really utterly staggeringly wrong.
It has produced a structural increase in pricing of imported goods (cost of doing business (paperwork, barriers) as well as direct tariffs) while also haircutting growth on exports to closest geographical partners - that also happen to be as well world's highest income.... the EU members.
There is already (see Martin Wolf, FT) clear decline in prior growth patterns seen pre-Brexit.
Gobsmakingly dunderheadedly wrong.
"Plus there was the strong racial motivation for the whole thing"
EH WHAT?
For God's sake when did Poles and Portuguese become another bloody goddamn race? Or Romanians?
For fuck's sake the reaction against EU immigration and freedom of movement is and was principally about fellow fucking Europeans for fucks sake.
There wasn't a strong racial motivation, there was a strong Xenophobic motivation, not really racial. It's not America and bloody Mexicans for god's sake, it's the proverbial Polish Plumbers and Romanians (etc).
When Brexit was under discussion and being voted for, there were Syrian and Iraqi refugees trying to get in, not to mention a number of different groups fleeing Africa.
Mexicans (or for that matter Latinos in general) aren’t a race either. And there have been lots of brexit voters who’ve expressed animosity towards people of other races, not just the “proverbial” Polish and Romanian immigrants. The Venn diagram of Xenophobes and Racists is pretty much a single circle.
Race is being used here as a synonym for "ethnic group". Not in the American sense of dividing the world into just three races (or maybe four if Native Americans are given their separate race).
It's long been common practice to conflate race and ethnicity when discussing prejudice and discrimination.
The problem with that is the ethnic prejudices and racial prejudices re based in different grounds. Ethnic differences are mainly seen as cultural. While racists posit biological differences.
If I’m reading the charts correctly, they simply refer to total value. So if imported goods have double in value and people are buying half as much, then the chart would not reflect that. So I would not draw the conclusions that KD seems to be drawing since the reality could be (again we don’t know from these charts) that the quality of life has gone down (less goods on average).
If one grows and one declines for a while, and then both grow at the same rate...the one that declined has done so permanently and will never recover. How much did Euro imports lose?
For that we need measures of the amount of trade, not of the percentage change. But it doesn't look good - and it doesn't look temporary.
The first commenter, Jasper in Boston, had it right. The pain of Brexit is more than just economic, just as a divorce is more than divvying up the joint assets. Because Europe was not primarily about money at all. I live in France and the Brits I know here were left alone by the authorities, though they were worried sick for a while. But no new permanent arrivals. Also no young French setting off to try their luck in London. Not that the UK was ever a part of the Schengen area.
And that lack of a European vision was the problem from the moment the UK joined. The same might be said of Ireland, btw, even if Ireland makes so much money out of tax-cheating the shit out of the rest of us that it'll stay forever. So Brexit was painful for everyone, but not nearly as wrenching as a Frexit or Italexit would be.
Note, though, that in military terms Britain has always been a part of Europe, both as an unwelcome conqueror in the days of Jeanne d'Arc and later as a defender of democracy in WW II and presently through its substantial aid to Ukraine.
Not super-surprising. Trade rules under the WTO regime between the UK and elsewhere (including the EU) are still pretty lenient, and the UK had a lot of time to manage Brexit more gradually because the EU brass had no desire to see them "crash out hard".
When Thatcher invited the Javanese auto plant in the UK, the idea was to use the country as a platform to flood the continent with UK built cars.
Today, the UK has nothing to offer to foreign investors, except a variation of English and a lot of bankers. good luck to them.
If the Brexiter think the continent will let the UK become fiscal paradise a la Singapore,... dream on again.
With Brexit, The cost of business rose for both side of the channel, except that the smaller one will learn fast that not have the same norms as your big neighbors is stupid.
"Plus there was the strong racial motivation for the whole thing,"
Evidence for this?
I would note, as one counter, that Britain (and not just Britain, but the Conservative Party) seems plausibly on his way to become the next PM (and, for that matter, Boris Johnson was part Turkish).
Calling everyone you disagree with a racist seems like exactly the sort of short-term political opportunism that, as a byproduct, destroys the functioning of the system, that was so rightly condemned when Newt Gingrich engaged in it. It's beneath you, Kevin!
Damn lack of editing. That sentence should be:
I would note, as one counter, that Britain (and not just Britain, but the Conservative Party) seems plausibly on its way to choosing Rishi Sunak as the next PM (and, for that matter, Boris Johnson was part Turkish).
Meanwhile, perhaps unsurprisingly, The Guardian asserts otherwise: https://www.theguardian.com/business/2022/oct/22/brexit-isnt-working-and-labour-must-be-honest-about-it-with-britains-electorate
Imports isn't really the metric to look at. It's exports. Prior to Brexit, UK companies could do business within the entire EU with no cross-border bureaucracy and now they might has well be Uruguay. *That's* what's killing a lot of British companies, particularly the smaller businesses that can't afford the team of lawyers it now takes to comply with EU import quotas/tariffs/regulations on everything from oysters to auto tires.