That much discussed trade between the UK and EU

In the run up to the Commons debate on national referendum on the UK’s membership of the EU, many talking heads kept referring to the UK’s trade with other EU member states.

Time and again on various news programmes we heard pro-EU advocates proclaim than anywhere between 40-50% of the UK’s trade is with the EU and therefore leaving the EU would be devastating to our economy.  Setting aside the flaws in the inherent suggestion that leaving the political structures of the EU would automatically mean we would lose our ability to trade with remaining EU member states, very little focus was directed at who holds the relative power in UK-EU trade.

A written answer in the House of Commons yesterday goes some way to explaining why so little attention was given to the question of who would come off worst from a trade dispute between the UK and EU.  For it was confirmed that the EU continues to do better out of trade with the UK than the UK does. In fact the Balance of Trade deficit the UK has with the EU has widened:

Mr Bone: To ask the Secretary of State for Business, Innovation and Skills what the size of the UK trade deficit with the EU was in each of the last five years.

Mr Davey: As published by the Office of National Statistics, the balance of trade between the United Kingdom and the European Union over the last years were as follows:

UK’s balance of trade in goods and services with the EU
£ million
2006 -29,616
2007 -35,235
2008 -28,582
2009 -27,421
2010 -35,534

While a number of commentators were quick to mention that Honda cars are made in Swindon and Nissan cars are made in Sunderland to take advantage of the UK’s ability to trade within the EU customs union, even with these manufacturing activities we still buy far more from the EU member states than they buy from us.  If both car makers moved to the continent it would only increase our balance of trade deficit with the EU and actually make us an even more valuable trading partner.

The figures make clear there is a vested interest in EU member states maintaining strong trade links with the UK, irrespective of whether the UK is self governing or ruled from Brussels.  To cite a loss of trade as a rationale for staying firmly inside the EU, and subverting the right of the British people to decide how this country is governed and by whom, is simply dishonest.

16 Responses to “That much discussed trade between the UK and EU”

  1. 1 Steve 01/11/2011 at 12:25 pm

    A wonderful post again, AM.

    Stripped of BS, the UK’s largets SINGLE NATION trading partner since the war (1945), has been the USA. It still is.

    We had a £20 billion trade deficit with Germany alone, in 2007. In 2007, we imported £16 billion of food from the EU, and exported £6 bn. A deficit of £10 bn. On food. In 1 year.

    Click to access BN53_RFS.pdf

    EU “incentives” were provided to Peugeot to move their plant from Coventry to Slovakia.

    Click to access HeartOfTheMotorIndustry.pdf

    HP sauce moved from B’ham to Holland. Twinings Tea to Poland.

    And all the Cleggmoron could come out with yestrday was “3 million jobs depend on us being in the EU”. Same old discredited propaganda.

  2. 2 tux1952 01/11/2011 at 12:40 pm

    Wasn’t there something called “The Rotterdam Effect” that also distorted the figures as well?

  3. 3 GoodnightVienna (@CallingEngland) 01/11/2011 at 12:56 pm

    I’ve yet to hear anyone in the mainstream challenge this blatant lie about trade figures. It’s something repeated endlessly until the man in the street takes it as gospel.

    As well as “The Rotterdam Effect” on export figures there’s also “The Dublin Effect” which skews our import figures in that goods destined for Ireland are routed via UK Ports and therefore added to our tally. (Dublin doesn’t yet have a harbour large enough to accommodate gigantic container ships).

    Time and time again, we are being deliberately deceived.
    Goodnight Vienna

  4. 4 James Morrison 01/11/2011 at 1:26 pm

    Well said AM – as John Redwood frequently likes to say, would BMW suddenly stop trading with the UK, if we were no longer part of the EU.

    It’s all such tosh, and it always always is

  5. 5 Autonomous Mind 01/11/2011 at 2:03 pm

    The Rotterdam/Antwerp effect has its equivalent with goods sent from here to the US as a transit point. Many EUphiles cite this as skewing Eurosceptic figures, so it is better to focus on the balance of trade.

  6. 6 John Payne 01/11/2011 at 2:08 pm

    Where are the media interviewers directly challenging the Liberal Democrats on this matter?

  7. 7 barry laughton (@kilkeal) 01/11/2011 at 2:20 pm

    The Europhiles mantra is trade. Nick states trade is jobs. It is obvious to anyone with half a brain that the balance of payments is strongly in Europe’s favour. If a restriction was placed on our exports to the EU, a British government would reciprocate in a similar way. (looking at the present pusillanimous government perhaps not.) The trade argument does not stand up. Leaves the Europhiles with few fig leaves, like no 3rd World War. So what did the UK get for its £28,000,000 sterling today.

  8. 8 Alan Douglas 01/11/2011 at 2:48 pm

    I understand 80 % of our “trade” is internal. So 20 % of out trade is with the world. Shall we say 1/2 of that is with the EU ? And THAT 10 % runs in their favour.

    What is to worry about ?

    Except the lies of all those who promote/spin the EU case ?

    Alan Douglas

  9. 9 NickM 01/11/2011 at 4:45 pm

    These are the figures from the ONS ‘UK Economic Accounts’ 2010 Q3 edition (for 2009 figures) (, figures rounded to one decimal, at current prices:

    UK GDP: £1395 billion [p7 table A1]
    UK total exports of goods and services to the whole world (inc EU): £390.9 billion [p23 table A10]
    UK total exports of goods and services to the EU only: £190.5 billion [p136 table B6]

    Note that different ways of counting, assessing and revising the data may change the figures.

    This shows that total UK exports of goods and services is 28%, of which the EU accounts for slightly less than half at 13.7% of GDP. Note this is not “half our trade” as the europhiles claim but half our exports. This will in any case be reduced by the Rotterdam and Antwerp effects. By far the greatest trade is internally, with ourselves, at 72% of GDP.

  10. 10 Katabasis 01/11/2011 at 5:52 pm

    And another piece of propagandistic bullshit minced around by Europhiles and Europlastics alike – and denied by one of the alleged academic authorities behind it no less, ladies and gentlemen I give you the truth of the “3 million jobs” claim:

  11. 11 EU Hypocrisy.. 01/11/2011 at 7:45 pm

    In the EU’s own words :

    “Bilateral relations

    The EU has successfully concluded a number of important trade agreements with trading partners

    The EU is firmly committed to the promotion of open and fair trade with all its trading partners.

    The EU has specific trade policies in place for all its partners and abides by the global rules on international trade set out by the World Trade Organisation.

    In addition to global-level negotiations within WTO known as the “Doha Development Agenda”, the EU conducts a number of negotiations with countries and regions around the world.

    Who does the EU negotiate with?

    The EU has successfully concluded a number of important trade agreements with trading partners and is in the process of negotiating agreements with many more.

    In addition to the WTO’s multilateral negotiations, the EU concludes bilateral agreements and devises specific trading policies with third countries and regional areas

  12. 12 EU Hypocrisy.. 01/11/2011 at 7:48 pm

    Between 2000-2009 the UK has ran up a colossal trade deficit of over £260 Billion with the EU.

    This is evidenced by the question asked by the Independent Labour peer, Lord Stoddart of Swindon :

    A few more briefing notes from Global Britain will also show the flaws in the arguments about EU trade :

    Click to access BN68GrowthExportsImports1.pdf

    “The non-existent, benefits of belonging to
    the EU Single Market

    Over the last ten years, British trade with the world outside the EU has grown significantly faster than British trade with the EU.”

    Click to access BN67PropUKeconomyExptoEU1.pdf

    “Less than ten per cent of the British economy is involved in exporting to the EU yet EU regulation is imposed on the more than ninety per cent
    of the economy which is NOT involved in exporting to the EU”

  13. 13 EU Hypocrisy.. 01/11/2011 at 8:19 pm

    Outside the EU, Norway has a massive trade surplus with the EU :

    EU Imports : 294 565 (NOK MILLION)

    EU Exports : 641 335 (NOK MILLION)

    Click to access norge_og_eu_2011.pdf

  14. 14 Ian 01/11/2011 at 10:38 pm

    Would the EU insist that we remain members of the European Economic Area (like Norway and Switzerland) if we left the EU?

    EEA membership means adherence to all those Single Market regulations which have done so much to wreck small industrial firms. We need to rebuild this sector.

    What if we said no to EEA membership? If Brussels were then to punish us with an import tariff, then our retaliatory tariff would wreck the continental economy. Bye bye euro, bye bye EU.

    So we can effectively BLACKMAIL a free trade agreement out of the EU upon leaving, and enjoy an industrial revival at the same time.

  15. 15 Brian H 02/11/2011 at 2:14 am

    There’s a famous American adage that explains why the EU and Europhiles want to keep Brits under their rule:

    “Never give a sucker an even break.”

  16. 16 Matt Davies 02/11/2011 at 7:33 am

    I wouldn’t mind being part of EFTA. Then all the companies that want to trade into the EUSSR, could do so, while companies that wanted to trade solely into the UK or rest of the world, could happily ignore all of the bullshit the EU pushes.

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