EXCLUSIVE: Goods-only EU trade deal could affect only 7.7% of UK GDP
92% of UK PLC may not be covered by any EU ‘trade deal’
© Brexit Facts4EU.Org 2020
Nearly 70% of UK economy is domestic, 18% is non-EU, 6% are non-tariff services exports
Most of UK GDP is purely domestic. In fact more than two-thirds (68.5%) of UK GDP last year had nothing to do with exports of goods and services to the EU, nor with any exports to the rest of the world. It was all about people and businesses in the UK, making, growing, buying and selling within the country, and paying their everyday bills.
Brexit Facts4EU.Org exposes the truth about the significance of any EU trade deal tomorrow
Below is a pie chart showing the total economy, and the small share of it represented by the proposed ‘trade deal’ with UK goods exports to the EU, as a percentage of GDP. We have excluded exports of services to the EU as they will apparently not be covered by any trade deal, at the EU’s insistence.
Brexit Facts4EU.Org Summary
Just how important are UK goods exports to the EU, as a percentage of GDP?
- Goods exports to the EU represent only 7.7% of UK GDP
- EU could stop all buying and the economic impact would still be less than Covid (-9.7% to Sept)
- Share of UK goods exports going to EU has dropped by a quarter since 2006
- UK now sells nearly a third more goods and services to rest of the world than it does to EU
© Brexit Facts4EU.Org - click to enlarge
[Source: All figures are for 2019, using the latest data from the ONS and HM Treasury.]
Why do so many people believe that nearly half our economy is dependent on the EU?
There are many people in the United Kingdom who for the last five years have been led to believe that almost half of the UK’s economy is under threat from an exit without a trade deal with the EU. It is an often-expressed fact that 46% of the UK’s goods exports go to the EU. (Mentioned less often in the media is that this share has fallen by a quarter since 2006.)
The fact which is NOT known by the general public is that the UK’s goods exports to the EU represent a very small proportion of the UK’s economy as a whole – just 7.7%.
Goods AND services - UK and the rest of the world versus the EU
The analysis below includes both goods and services, purely for completeness and to pacify Remainers (see below). All figures are for 2019, using the latest data from the ONS.
© Brexit Facts4EU.Org - click to enlarge
- Total UK GDP: £2,214.3 billion
- Domestic economy: £1517.6 billion
- UK exports of goods and services to rest of world: £396.5 billion
- UK exports of goods and services to the EU: £300.3 billion
As can be seen in the figures above, the UK now sells almost a third more to the rest of the world than it does to the EU. (£96.2 billion more to the non-EU world than to the EU.)
For Remainers - Services exports to the EU represent only 5.6% of UK GDP
The EU has refused to discuss a proper trade deal encompassing the area where the UK is strongest – services.
The EU’s Single Market itself “does not function properly for services,” according to the EU’s own Single Market Commissioner in 2017. Indeed, just before the EU Referendum the OECD published a major, damning report on the EU’s Single Market, describing it as “stalled and unfinished.” Naturally the BBC chose not to highlight this.
That said, as Remainers always bring up services even when they are not relevant, we are including these here for comparison. The UK’s export of services to the EU account for only 5.6% of UK GDP.
Informative opinions
Mr David Campbell Bannerman is a former MEP of 10 years’ standing, former Chairman of the Conservative Bow Group, former Deputy Leader of UKIP, and crucially has many years of experience sitting on the EU Parliament’s International Trade Committee.
He is also the originator of the ‘SuperCanada’ trade option, for the future trade arrangement between the EU and the UK, and is an ardent Brexiteer.
EU Parliament Brexit spokesman - the Belgian Guy Verhofstadt - once called David Campbell Bannerman's comments “insane”. We can’t think of a better recommendation for reading what Mr Campbell Bannerman has to say.
Photo left: Guy Verhofstadt, MEP from Belgium, a divided country with less than a fifth of the economic power of the United Kingdom - an extreme EU federalist politician in the EU Parliament
Here is a short excerpt from our interview with David Campbell Bannerman.
“Your excellent research shows very strongly that the main driver of our economic wealth isn’t the EU – it’s our own economy. We're making and selling so much to ourselves. Almost 70% - as you found out - is generated within our own borders, and 86% has nothing to do with the EU.
“So this argument that we have to do a deal with the EU or we're finished is a nonsense.”
“Post COVID we've got to be much nimbler as an economy – indeed as a country. We've got to be more competitive, we've got to be less regulated. All of these things can be compromised by a bad deal with the EU involving regulatory control. That is not acceptable. That is too big a price to pay.”
Observations
The key message of this report is simple. The UK’s goods exports to the EU are relatively small in overall economic terms. As far as anyone can tell from the secretive EU trade talks, the EU is not including services in any deal.
The media and the Remain Establishment have always talked up the percentage of UK exports which go to the EU. This is never put into context, so we have done this. Many people seem to believe that almost half the UK’s economy will be at risk, but this has never been the case. It just hasn’t been explained that exports are merely a minority part of UK GDP.
Leaving without a deal will not mean that these exports to the EU will simply stop. The average EU tariff on all goods is around 3%, so if the UK exits on WTO terms then a large number of UK exporters to the EU will see little change in their sales. The pound has dropped against the euro by more than that percentage, so most of the UK’s products will still be cheaper for EU buyers than they were a few years ago.
The ‘trade deal’
It remains to be seen at the time of writing whether a deal will be done by midnight tomorrow, or – goodness knows – at some further delayed time and date. At this very late stage, any kind of deal will almost inevitably involve unacceptable compromises for most Brexiteers.
In that event, it is important for as many people as possible to know just how big a price we will be paying in loss of sovereignty for such a relatively small and diminishing amount of business with the EU: 7.7% of GDP, and dwindling. Despite this we’ve been going through endless negotiations, humiliations and agonies for it.
Prime Minister, you and Lord Frost did your best but the EU always was a project run by ideological extremists. Please walk away tomorrow.
HELP!
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[ Sources: Office for National Statistics | House of Commons Library | HM Treasury | OECD | David Campbell Bannerman ] Politicians and journalists can contact us for details, as ever.
Brexit Facts4EU.Org, Sat 19 Dec 2020
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