Fall in UK trade with EU should spur rewrite of post-Brexit rules, says IPPR
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Thinktank’s report details decline in trading position and also calls for new strategy as Trump takes power in US. A slump in trade with the EU should spur ministers to negotiate a fundamental rewrite of post-Brexit rules to more closely align the UK with Brussels, a leading left-of-centre thinktank has said.
Donald Trump’s arrival in the White House next week should also encourage the government to get on the front foot in trade agreement talks with the US to support the growth of UK exports, said the Institute for Public Policy Research (IPPR). In a report revealing the full extent of the decline in Britain’s trading position that has been inherited by the Labour government, the IPPR said ministers needed to consider a wide range of measures to give industries – including energy, defence, food, communications, healthcare and pharmaceuticals – a better chance of selling products and services overseas.
The report said UK trade policy had been “muddled” and “rudderless” since the 2016 Brexit vote, adding that since leaving the EU single market and customs union in 2021, efforts to strike mini-deals with non-EU countries had run their course. Estimates suggest that compared with staying inside Europe’s free trade zone, UK goods exports to the EU between 2021 and 2023 were down by 27% while EU goods imports to the UK were down by 32%, the report said.
Meanwhile, other G7 countries including the US, Japan, France and Italy enjoyed a boom in trade. The UK experienced a 10% decline in total goods trade from 2019 to the end of 2023. Figures from 2019 to the end of the third quarter of 2023 show other G7 countries saw an average 5% increase.
