EU goods exports in 2019 — to FTA countries and to all countries globally

In the EU Commission’s report published on 12 November, the EU claims that “The 4th Annual Report on the Implementation of the European Union’s Trade Agreements in 2019 shows the benefits of our expanding global trade network.”

EU goods exports in 2019 — to FTA countries and to all countries globally

• Growth in EU goods exports to all countries globally: 3.5%
• Growth in EU goods exports to countries covered by ‘the 36 major preferential EU trade agreements’: 4.1%
• The difference in growth between the EU’s trade deal countries and all countries globally: 0.6%

Growth in UK goods exports to all non-EU countries last year: +14.1%

EU’s growth in exports is small compared to the UK

One of the jobs of the EU Commission, which has sole and exclusive responsibility for negotiating trade deals for the EU’s member countries, should be to grow exports. As an EU member, the UK was prevented by the EU from negotiating its own trade deals and was forced to rely on the work of the Commission.

The EU Commission is careful to talk about ‘trade’, meaning imports and exports. When focusing in on exports, the position for the EU is even worse than its headline figures.

The EU’s trade agreements make a negligible difference to exports

The report talks about its “36 major preferential EU trade agreements” (FTAs) covering 65 countries — not the 100 it continuously boasts of having. Incredibly the report says that EU exports to these major FTA countries only grew by 0.6% more than the EU’s exports to all the countries around the world.

To put this into context, the UK’s goods exports to non-EU countries grew by 14.1% last year, as British exporters started looking globally instead of focusing on the EU27 markets.

What about trade in services, the UK’s area of strength?

Unfortunately, the EU’s performance with its FTA partners in the matter of services — which represent approximately 80% of the UK economy — was actually worse than its growth in services globally.

“For trade in services the latest figures are those for 2018. Trade in services with the 65 partners covered by this report grew by 1.7% in 2018, slower than total EU trade in services (+2.3%)”

- EU Commission report, 12 November 2020

Was a UK-EU trade deal mentioned in this latest report? No.

The UK is the EU27’s second-largest export market after the United States. It is 60% bigger than the third-largest market, China.

Despite this, the EU’s report contains no mention of the possibility of a trade deal with the United Kingdom. It could be argued that the report relates to actual trade deals in place, but for there to be no mention of the EU’s second-largest export market is a little surprising.

As ever, the EU has singled out some examples of success in its report. Overall, however, the total figures are uninspiring, to say the least.

For there to be only a 0.6% difference between export growth rates with FTA partners compared to the EU’s export growth rate globally shows how disappointing the EU Commission’s performance has been.

Furthermore, for the growth in the export of the EU’s services to FTA partners to be significantly lower than its growth in the export of services globally, just goes to show how the EU has paid scant regard to the UK’s key area of economic strength.

Canada and Japan deal templates, not on offer to the UK

Interestingly, two of the trade deals which the EU singles out in its report are not available as templates for a deal with the UK.

The EU’s trade deals with Canada and Japan are regularly trumpeted by the EU Commission. If these deals are so wonderful, why isn’t the EU prepared to offer anything similar to the UK? Things become even stranger when considering the fact that the UK’s Dept for International Trade has just agreed ‘rollover deals’ with both of these countries.

Earlier this year the EU suddenly came up with the bizarre notion of ‘geographical proximity’ to justify its refusal to agree on a normal trade deal with the UK. This is despite the fact that the then EU Council President Donald Tusk held out the offer of a Canada-style deal when persuading the UK Government to sign up to the EU’s abominable Withdrawal Agreement.

As soon as the WA was signed by Boris Johnson on 24 January 2020, it seemed that a Canada-style trade deal was off the table. Apparently, the EU had suddenly noticed that the UK was geographically close to the continent. Why that should then be a barrier to continuing the existing zero-tariff trading arrangements remains a mystery.