Valentina Romei quotes an economist at the Resolution Foundation think-tank who labels Britain’s trade performance with the EU since Brexit as a “disaster” (“Goods exports lag behind G7 peers”, Report, April 13).
UK exports to the EU have indeed performed very poorly in recent years, but imports have also been hard hit. What matters for overall UK output is net exports.
For years prior to the Brexit vote, the UK’s real goods trade deficit with the EU increased, reaching over 5 per cent of gross domestic product and subtracting from growth. Since the Brexit vote, the real trade deficit with the EU has shrunk by 1 per cent of GDP, actually adding to growth.
Meanwhile, since 2020, the UK’s real goods deficit with non-EU countries has risen, with export performance also miserable, which should puzzle Brexiters and Remainers alike. Both of these groups believe, though observing from different standpoints, that trade relations with Europe will transform the UK’s economic prospects.
If only it were so simple. The UK’s relative economic decline set in before EU membership, continued right through it and is set to stretch far into the future.
What ails Britain is deeply embedded in the domestic economy. The UK’s miserable export performance is a symptom of a far more entrenched and troubling malaise, not the cause of it. Unless Britain and its government wakes up and makes far-reaching and radical reforms, the inexorable slide into mediocrity will continue.
The failure to appreciate that is the true disaster.
Paul Mortimer-Lee
Research Fellow, National Institute of Economic and Social Research (UK) Purchase, NY, US
