How important is trade with the EU across UK regions?

13 June 2016

Different regions and nations within the UK have different trading relationships with the European Union. Unfortunately, our ability to understand these differences is hampered by the fact that only data on trade in goods (principally manufactured products and commodities) is available on a regional basis. Yet even this limited information reveals a great deal.

In absolute terms, the regions of the South of England export more goods to the EU than those in the North of England and the devolved nations, with the exceptions of the North West (which exports goods to the EU at comparable levels to the Southern regions) and the South West (which exports relatively few goods to the EU).

However, despite exporting less to the EU than other regions, the export bases of the North East, the South West and Northern Ireland (among the UK’s poorest regions) are far more dependent on trade with the EU rather than the rest of the world. In each case, exports to the EU constitute around 60 per cent of total exports from the region. Moreover, while the UK overall has a substantial goods trade deficit with the EU these regions – plus Scotland and Wales – these are the only regions with goods trade surpluses.

The North East’s acute dependence on exports to the EU is underlined by the fact that, once differences in population are taken into account, the region exports substantially more goods per capita to the EU than any other region. The North East specialises in the export of chemicals and cars to the EU – these are both product areas that attract very high tariff rates for trade between the EU and non-EU countries.

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