Brexit: nine UK regions where exports have fallen since 2018, including Wales, the South East and Yorkshire

One trade expert told NationalWorld that businesses “do not see the UK as a stable place to trade”. 

Wales, Northern Ireland, the East and West Midlands, South East, South West, Yorkshire and the North East have all seen worldwide exports shrink between 2018 and 2021, with annual exports from the South East alone down by £11 billion, analysis shows. 

London, on the other hand, has seen some of the biggest gains with exports worldwide up by £18 billion (11%) over the same timeframe.

The UK Government said total trade with the EU had been worth £772 billion last year, 14% higher in cash terms than before the pandemic - although these figures do not account for the effect of inflation. A spokesperson said it had a package of support available to exporters of all sizes, “targeted at getting businesses across the UK economy exporting more”. 

Northern Ireland has seen exports to the EU plummet by more than a third, according to analysis of data published by the Office for National Statistics (ONS). Export trade from Northern Ireland to the EU collapsed by 37.1% between 2018 (pre-Brexit) and 2021, while the West Midlands and South West of England also saw significant drops in the value of exports during the time period.

Stephen Hunsaker, trade and economics researcher at UK in a Changing Europe, a UK-wide network of academics and researchers coordinated from King’s College London, told NationalWorld that the UK is in a position where it is “not as appealing as a market to trade and grow business” and that the export trade reduction in the likes of Northern Ireland was down to unknowns. 

Mr Hunsaker said: “Brexit has made trade slow, we have not seen expanded trade with non-EU and EU countries. I think this is because businesses do not see the UK as a stable place to trade right now, there is a lot of uncertainty right now.” 

Hunsaker added that Liz Truss’ mini-budget “fiasco” added “fuel to the flame” of business uncertainty.

Three years have now passed since the UK left the EU in January 2020. The latest annual import and export figures show how the UK's trade deficit with the European Union hit a record low last year.

The UK recorded a deficit of more than £90 billion, the lowest since current records began in 1999. A trade deficit happens when a country’s imports exceed its exports during a given period, while a surplus means exports exceed imports. There are pros and cons to having a trade deficit, but a very large deficit can negatively impact the overall economy.

ONS data shows the UK’s goods balance with the EU was the driver of the deficit, coming in at £117.3 billion, but its services had a surplus of £25.4 billion, leaving a trade deficit of £91.9 billion – a 21.5% drop on pre-Brexit (2018) figures. Meanwhile, the UK’s trade balance with non-EU countries (i.e. the rest of the world) has been narrowing, and stood at a surplus of £5.2 billion in 2022. 

The chart below shows how trade with the EU and non-EU countries has changed since 1999. If you cannot see the chart, click here to open in a new tab.

The UK regions experiencing the biggest drop in trade

Regional figures only cover the period up to 2021, so are not as recent as the UK-wide figures.

Northern Ireland, the only part of the UK to have a land border with the EU, had the greatest decrease in exports to the bloc between 2018 and 2021, with their value dropping by more than a third (37.1%). This was followed by the West Midlands, which saw exports drop by 22.3% and the South West which saw a decrease of 16.4%. The only regions to see an increase in export trade to the EU during the time period was Scotland (6.3%), the North West (3.6%) and London (11.2%). 

For pre-Brexit comparisons, NationalWorld has used the year 2018, which the ONS describes as the latest stable year in which trade was unaffected by stockpiling in the lead up to the UK leaving the EU and trade disruption caused by the coronavirus pandemic.

The analysis is based on exports in cash terms, which does not take inflation into account, so the real-terms fall will be larger. The chart below shows how export trade to the EU from UK regions has changed since 2018. If you can’t see the chart click here to view it in a new tab.

One crucial question is whether exports to non-EU countries are increasing to fill this gap. The latest regional figures suggest this has not happened in many parts of the UK. Analysis shows export trade with non-EU countries has increased in four UK regions since 2018 but fallen in eight. Northern Ireland has again seen the largest drop in export trade, with figures falling by 21.4% since 2018. The chart below shows how export trade with non-EU countries has changed over the last three years – if you cannot see the chart click here.

When exports to EU and non-EU countries are combined, most areas have seen the total value of exports fall. Only the  East of England, North West, Scotland and London have seen an increase in export trade since 2018. Northern Ireland has again seen export trade plummet the most, with figures dropping by more than 30% since 2018. If you cannot see the worldwide export chart below, click here to view it in a new tab.

What is driving the drop in trade and can it be improved?

Despite new regulations put in place as a result of leaving the EU, experts warn that measuring the impact of Brexit on trade is not entirely straightforward as the Covid-19 pandemic and the war in Ukraine all happened around the same time and have all affected trade to some degree.

Being part of the EU means no tariffs or trade barriers with other countries in the bloc – the UK is governed by the Trade and Cooperation Agreement which allows tariff-free trade in goods between the UK and EU but trade barriers are higher than before.

Mr Hunsaker added: “There is not an appetite among business and trade to build out further markets in the UK because they don’t know what the future holds. 

“Northern Ireland has seen the worst trade reduction since 2018 and this will be largely due to uncertainty. [Businesses will be asking] what is happening at the border [with Ireland]? Are we still part of the single market? Are we part of the UK? 

“I think the Windsor Framework will help that. It would at least create, the appearance at least, a more stable environment for trade and at least there is something with agreement and a pretty good deal.”

The Windsor Framework was agreed earlier this year and was designed to make trade with Northern Ireland and the EU (i.e. Ireland) easier by reducing much of the red tape.

A spokesperson for the Department of Business and Trade said: “Latest figures show trade with the EU was worth £772 billion last year, soaring 31% in current prices compared to 2021, and 14% higher in current prices than before the pandemic.

“We have a package of support tailored to exporters of all sizes. This includes our Export Support Service, International Trade Advisors and UK Export Finance, all targeted at getting businesses across the UK economy exporting more.”

Which UK regions rely the most on the EU for trade?

Additional figures give us an insight into which regions rely on the EU the most for trade. The figures show vast geographical differences in reliance upon trade with the EU.

Northern Ireland was found to have had the highest proportion of trade with the EU in 2021. The EU also accounts for a high proportion of exports for Scotland, the North-East and Wales, while the EU accounts for a high proportion of imports in the South-East, East and West Midlands. The charts below show which UK regions imported and exported the most goods to and from the EU last year. 

Other figures show how the proportion UK trade is split between EU and non-EU countries over the past 23 years. The chart below shows how non-EU imports made up more than half of the UK’s imports in 2021 and 2022. In 2021, EU imports dropped to a record low of 46.5%, while last year it was marginally higher at 47.9%. If you cannot see the chart below click here to view it in a new tab.

In comparison, exports from the UK to non-EU countries have been widening. In 2022, exports to non-EU countries hit a record high at 58.3% of all exports. The proportion of exports to non-EU countries has increased consecutively since 2019 (pre-Brexit). The proportion of exports to the EU was highest in 2007 when it hit 50.4%. The chart below will show you how the UK’s exports have changed over time – click here to view it in a new tab if it is not visible below.