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The first year of the UK’s post-Brexit trade agreement with the European Union (EU) saw firms on the continent lose a greater percentage volume of trade than exporters from the UK, according to research.
The study of 1,200 products, by the Centre for Economic Performance (CEP) at the London School of Economics and Political Science, found UK imports fell by 25% relative to those from the rest of the world during 2021.
It reported that exports to the bloc avoided a sustained decline by the same measure, with a smaller and only temporary drop.
However, it warned that trading relationships with the continent did suffer, with small firms in particular struggling after the Trade and Cooperation Agreement (TCA) began on 1 January 2021.
The report said: “We find a smaller and only temporary decline in relative UK exports to the EU (after Brexit), but nevertheless a large and sustained drop in the extensive margin of exports, driven by the exit of low-value relationships.”
Report co-author Rebecca Freeman added: “Although it is surprising that imports were hit harder than exports during the first year of the TCA, it would be a mistake to conclude that exporters were unaffected.”
It supported claims by business groups, the study said, that the departure from the EU’s single market and customs union had proved detrimental to small firms.
Thomas Sampson, another co-author and associate professor of economics at LSE, said: “The TCA has increased trade costs, leading to a fall in imports from the EU and reducing the number of products exported to the EU by UK traders.
“These changes make the UK a harder place to do business.”
The report did not seek to examine the long term effects of the TCA though the new…
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Source : skynews
