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New UK Government report shows steep fall in trade with both EU and non-EU countries – with Brexit having a bigger impact than Covid.

Today’s ONS report looking at the combined impact of Covid and Brexit shows trade with EU countries has declined 23.1%. The report also reveals Brexit problems far outweighed Covid issues in the first quarter of 2021.

A new UK Government report  highlights the real impact that the ‘double whammy’ of Brexit and the coronavirus have had on UK trade, says the international delivery expert ParcelHero. Today’s Office for National Statistics (ONS) report, ‘The impacts of EU exit and the coronavirus on UK trade in goods’, shows steep declines in imports and exports to both the European Union (EU) and the rest of the world.

ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: ‘The major new Government report examines UK world trade figures in the first quarter (January-March) of 2021 and compares them to the same period in 2018, before any potential impact of Brexit preparations and the pandemic on exports and imports. This comparison gives the true picture of the damage done to UK trade by both events.

‘Total trade in goods with EU countries decreased by 23.1% in the first quarter (Q1) of 2021 compared to Q1 2018. Contrary to the optimistic claims of Brexiteers during the referendum, this was not balanced by an increase in trade to non-European countries, such as the USA. Non-EU trade declined 0.8% in the same period, though total trade with non-EU countries surpassed that with EU countries in the first quarter of 2021 for the first time.

‘The report also reveals that in 2021 Brexit has had a far more significant impact than the pandemic. In mid-February 2021, the report reveals over 55% of exporters said Brexit changes were causing them problems, compared to only around 10% of exporters saying Covid was a challenge.

‘It’s small wonder that trade with Germany (the UK’s biggest EU partner) and Ireland – two of Britain’s main trading partners – has collapsed significantly. Between December 2020 and January 2021 alone, Germany experienced the greatest fall in UK trade of any major trading partner – £1.7 billion. In fact, since Q2 2020, the UK has imported more from China than it has from Germany.

‘Exports of goods to Ireland saw the greatest proportionate fall of the UK’s top 5 exporting partners after the EU transition period ended. They fell by 47.3% (£1 billion) between December 2020 and January 2021, while imports from Ireland fell by 4.4% (£0.1bn).

‘The key takeaway from this report is that UK trade has not just hit a run of bad luck. While no one could have predicted the pandemic, the end of the EU transition period was entirely foreseeable and its worst effects the result of an 11th hour deal that came too late for most exporters. The deal contained huge fudges, including both the Northern Ireland Protocol and overcomplicated proof of origin requirements to prove items were made in the EU or UK.

‘ParcelHero’s own in-depth analysis of the ongoing EU-UK trade problems and, in particular, the powder keg Northern Ireland Protocol agreement can be seen at: