Are you undecided on the EU referendum debate, and unsure how you will vote?
Check out my analysis of the UK import / export data, and perhaps you’ll become closer to a decision. If you find the following helpful, please share with your social media buddies via Facebook, twitter, and all the other sites!
In honour of the Euro 2016 competition, I am keeping score between the Leave Campaign, and the Remain Campaign. Any fact from my analysis that supports either campaign scores them a goal… Let’s see who wins 🙂
Please note I do not support either Leave or Remain side on this website. It’s up to you to make up your mind. I’ve been disappointed with the quality of information available throughout the campaign, and this is my small way of making a difference.
All data comes from HMRC site UKTradeInfo, an excellent resource to dig into the stats, if you’re that way inclined…
So how much do we import and export?
Let’s start off simple, looking at the totals for 2015. Figure 1 shows how our imports compare to our exports, and the breakdown of EU and Non EU countries.
A couple of clear facts emerge:
- The UK imports more than it exports (£106 billion more!)
- The EU is a major provider of imports (53% of total), and a major receiver of exports (44% of total)
- Imports (-2.3%) and exports (-1.8%) were lower in 2015 than in 2014, but interestingly, the exports to Non EU countries increased (+4.7%), suggesting non EU countries were our source of growth in 2015.
This information has been used by both sides to prove their side of the argument.
On one hand, you can see that the EU is a huge trade partner with the UK, so vote Leave would impact this relationship and therefore hurt our economy.
On the other hand, the EU imports more to the UK as a percentage (53%) than it receives as exports (44%), suggesting the EU countries are benefitting from access to the UK as a market, without giving us supporting export trade that helps our economy grow.
Also, the only area of growth in these high level figures is exports to the Non EU partners (+4.7%).
Using a football analogy to keep score, I’ll award a goal to Remain due the size of the EU trade, but a goal back to Leave due the growth of the Non EU trade.
So we’re at 1-all after ten minutes 🙂
Let’s go deeper into the numbers…
So who are our major trade partners – EU and Non EU?
Figure 2 shows the split of the previous information by country. The top ten EU countries and top 7 Non EU countries are shown (otherwise the table gets too big to look at on a phone screen…!)
What are these numbers showing me???!!
This table shows the absolute value in pounds sterling of the exports and imports by country, what proportion of the total this makes up, and the change Vs. the prior year (i.e. growth or decline).
For example, The UK imports £61 billion worth of goods from Germany, which is 14.8% of our total imports, and these imports have grown Vs. 2014 by 1.3%. The UK exports £30 billion to Germany, which is 10.0% of our total exports, and the amount of exports have decline Vs. 2014 by 3.9%.
What are the facts from this information?
So you can draw your own conclusions from the table if you wish, however here are a couple of nuggets that jump out at me when reviewing the numbers.
- I have cut the data into roughly equal thirds.
- Large trade partners (Germany, USA and China) with over £30bn of either exports or imports
- Medium trade partners (6 from EU, and Switzerland) with over £10bn of exports or imports
- Small trade partners (everyone else – less than £10bn of exports or imports)
- Of the large trade partners, USA and China have strong growth in both exports and imports. Germany has strong growth in imported trade into UK, but decline in exported UK goods to Germany.
- Trade slowed with the medium partners – both imports and exports are lower than 2014, with the exception of Spain (EU) and Switzerland (Non EU).
- The UK small partners trade slowed with the EU partners, but grew strongly with the Non EU partners.
Using the figures above, you could say that the UK trade with non EU countries is stronger than that of EU partners. Exports are are growing to Non EU trade partners, and imports from our top 2 Non EU countries (USA and China) are also growing. The EU position is decline in both imports and exports.
However, before any Leave campainers start crowing, it is clear that our EU trade partners are still a very large part of our underlying economy. There are 7 countries I have classified as large of medium for the EU, and these countries make up more than a third of UK exports.
Also, the trade between Non EU countries (e.g. USA) and the UK is based on the current trade agreements with the EU. So the UK would need to renegotiate these deals with Non EU countries.
What would happen if… If trade between UK and EU fell by 1% due to an exit from the EU, this would mean a reduction in UK exports of £1.3bn per year. However imports from EU countries would reduce by £2.2bn over the course of a year. Both EU and UK economies would be impacted by this.
Going back to my football analogy, I’ll award a goal to Leave given that they have 2 absolutely huge trade partners that are growing strongly, that are not in the EU (USA and China). However Remain equalise by the fact that the trade with these 2 partners are based on current EU deals, so require future negotiation.
Final score by my reckoning is 2 – 2. For me, the economic argument is not clearly supporting either Leave or Remain. Both have evidence in the numbers supporting their claims, but neither side have a crystal ball. Take anything the politicians say with a massive pinch of salt. Also, take anything the economists say with a slightly smaller, but equally salty pinch of salt. Economists are great at doing long term predictions, but often their predictions are out of date by the time the ink has dried…
How should I vote?
Really, the economic argument comes down to a number of factors. How you feel about those factors will drive your decision.
- Do you fear economic instability? If so, probably best to vote Remain, as the result of this vote is certainly more certain – as nothing really will change as a result.
- Do you believe that UK can continue to trade with all countries, if we leave the EU? If you believe this, then you voting Leave makes sense
- Would you rather focus UK efforts on trade with Non EU (given the growth and size of market)? If so, vote Leave.
- Do you see the large number of EU imports as vital for the economy? If you believe this, then you are probably leaning toward Remain.
Ultimately, the way you vote will be swayed by a number of arguments and factors. You have a great chance to ensure that your voice is heard, so make sure that you get out there and vote!
I hope that you have found this at least a little helpful in making your decision. If you liked this, please ensure that you share on Social Media, to make sure others get the chance to review this information before making a decision.
Good luck, and see you on the other side!