Three years after Britain left the European single market, trade between the country and its former EU partners has collapsed and is in decline, a report said on Tuesday. Britons are increasingly reliant on their fragile local networks, leading to impoverishment and episodes of shortage in supermarkets, especially outside London.
Between 2021 and 2023, UK exports to the EU fell by 27% and imports by 32%. according to a study by Aston Universityin Birmingham. The decline is noticeable in both the quantity and variety of goods and services traded and coincides with data published by the government and other academic studies.
The novelty of this analysis is that it highlights the worsening of the situation contrary to the hypothesis that, after the initial shock, businesses and citizens would get used to the new requirements and relations would resume more normally. This has not happened, and the trade agreement that the EU signed with the United Kingdom remains an obstacle due to the additional bureaucracy needed to avoid paying customs duties and the requirements to which British products have not adapted. One of the most affected sectors is the food sector.
“The negative impacts of the Trade and Cooperation Agreement have intensified over time, with 2023 seeing a steeper decline in trade than in previous years,” the report says. “This suggests that the transition in the UK-EU trade relationship after Brexit does not represent a simple short-term disruption, but rather reflects profound structural changes that are likely to persist.” The data are even more striking when one considers that in previous years, economies have been crippled in some respects by the pandemic.
Delayed requirements
And this is happening even though not all of the agreement’s requirements have been implemented, which means more paperwork and obstacles at the border. For example, the British government has decided to delay again the controls on fruit and vegetables purchased in the EU, which were due to come into force at the end of October and have already been suspended three times. The last delay had put them in January 2025, but the new Labour government, fearing the shortages that British supermarkets already periodically suffer from and the rise in prices, has again postponed the controls for at least another six months.
The UK has also failed to replace trade with its neighbours with relations with other blocs such as the US, with which it has failed to sign a new trade agreement. The decline in relations with the EU means that the country continues to lose clout and wealth.
Keir Starmer’s plan to support and improve deteriorating public services is based on the hope of increased UK growth, but this is increasingly difficult because of the disconnect with its main market. The UK still buys half of the foreign goods in the EU, far more than it buys from its second-largest market, China (13%), and the US (12%). And the same is true of what it sells to other countries.
“Without urgent policy interventions, the UK’s economic position and its place in the global market will continue to deteriorate,” said economist Jun Du, lead author of the report.
Approach with minor adjustments
Starmer has promised to move closer to the EU, but his proposals do not include a return to the single market, and without taking that step, the adjustments he can negotiate to the trade deal with Brussels are minor. Even seemingly simple ideas, such as a mobility deal for young people and musicians going on tourare progressing, among other things because of Brussels' lack of interest in concluding tailor-made agreements for the British and with little scope.
Academics recommend that the UK government try to negotiate with the EU improvements in specific sectors such as agriculture and textiles, digitalise border processes, integrate into EU systems and adapt UK regulations to EU regulations.
“The divergence in regulatory standards between the UK and the EU has created significant trade barriers. “Efforts to reduce unnecessary differences, particularly in highly regulated sectors such as chemicals and pharmaceuticals, can significantly reduce costs,” the report says. The latter solution has already been suggested by the current government in relation to these sectors, even though complete independence from EU regulatory decisions was one of the supposed benefits defended by Brexit supporters.
The report also recommends strengthening local networks, supporting small and medium-sized enterprises and trying to sign trade agreements with other regions.
The majority of the British population believes that the disadvantages of Brexit outweigh the advantages, according to a YouGov poll in August. If there was a referendum on returning to the EU, 59% say they would vote Yes, while 41% say they would vote against. But most also believe that, without prior public consultation, Starmer now has no “mandate” to try to bring the UK back into the EU.