Brexit has had a significant negative impact on goods trade between the UK and the EU, with a new report from Aston University revealing that annual UK exports of goods to the EU were 17% lower between 2021 and 2023 compared to if Brexit had never occurred. The decline in exports has affected most sectors, indicating a deepening structural change rather than just a short-term disruption. The trade relationship between the UK and the EU, which accounts for nearly a third of UK GDP, remains crucial for economic stability and growth for both parties.
The reduced variety of British goods exported to the EU has led to small businesses in industries such as food and clothing reconsidering their exports due to increased costs and red tape post-Brexit. The post-Brexit trade deal has introduced significant barriers to UK-EU trade, prompting researchers to recommend sector-specific agreements, improved customs procedures, and closer regulatory alignment with the EU to enhance trade ties. Without urgent policy interventions to address these issues, the UK’s economic position and global market standing will continue to weaken.
Brexit has had a detrimental impact on the UK economy, with research showing that between the 2016 referendum and July last year, Brexit caused an estimated hit to UK GDP of between 2% and 4%. The long-term effects of the new trading relationship are expected to reduce Britain’s output by 4% compared to if it had remained in the EU, according to the Office for Budget Responsibility. The economic case for a quick but ambitious UK-EU reset has been emphasized by experts, highlighting the need to address the negative effects of Brexit on trade between the two parties.
While goods exports to the EU have declined, services exports to the bloc have seen a record high, reaching £172 billion over the 12 months to March. The UK government has expressed its commitment to improving trade and investment relations with the EU while tearing down unnecessary trade barriers. However, it has ruled out a return to the single market, customs union, or freedom of movement. The impact of Brexit on UK-EU trade has intensified over time, with the need for policy interventions to address the challenges posed by the new trading relationship and support economic growth in the UK.
