One Year After Brexit, Chilly UK-EU Relations... "Weakened Supply Chains"

Customs Clearance and Non-Tariff Barriers... Decline in UK-EU Trade

[Image source=Yonhap News]

[Asia Economy Reporter Moon Chaeseok] Trade between the United Kingdom and the European Union (EU) has declined and the global value chain (GVC) has weakened following Brexit, according to an analysis.

According to 'One Year After Brexit: The UK's Foreign Trade and Implications,' released on the 30th by the Korea International Trade Association's Institute for International Trade and Commerce, trade between the UK and the EU has significantly decreased compared to trade with non-EU countries. The UK officially left the EU on January 1 of last year, when the Trade and Cooperation Agreement (TCA) was provisionally enforced.

In the first year of Brexit, the UK's exports to non-EU countries increased by 13% compared to the previous year, while exports to the EU rose by only 5.7%. During the same period, imports from non-EU regions increased by 5.9%, whereas imports from the EU grew by just 0.5%.

The rankings of major trading partners also changed. Among the UK's top five export destinations last year, the share of Switzerland, a non-EU country, rose to 6.1%, making it the second largest, surpassing Germany at 5.8%. During the same period, China's share as the top import country increased slightly from 8.2% the previous year to 9.1%.

In terms of product categories, trade in consumer goods between the UK and the EU sharply declined. Exports of consumer goods to the EU decreased by 12.5% year-on-year, and imports also fell by 9.1%. Trade significantly dropped mainly in items with many small and medium-sized enterprise exports, such as wireless communication devices, computers, fashion accessories, and personal items.

Kang Sangji, a researcher at the Korea International Trade Association, said, "Despite the maintenance of tariff-free and quota-free policies between the UK and the EU after Brexit, the center of the UK's foreign trade is shifting toward non-EU countries," adding, "The decline in trade and weakening of the value chain between the two regions is evidence that non-tariff barriers have a significant impact on trade."

This content was produced with the assistance of AI translation services.