Brexit changes caused 22.9% slump in UK-EU exports into Q1 2022 - research

Dec 8, 2022

3 min

Jun Du


  • Researchers at Aston assessed the impact of the Trade and Cooperation Agreement between the EU and the UK
  • UK exports fell by an average of 22.9% in the first 15 months following the deal
  • Variety of UK products exported to EU down by 42%


Research by the Centre for Business Prosperity at Aston University has shown that UK exports to the EU fell by an average of 22.9% in the first 15 months after the introduction of the EU-UK Trade and Cooperation Agreement, highlighting the continuing challenges that UK firms are facing.


Building on earlier work funded through Aston University’s Enterprise Research Centre, the researchers found that a negative effect on UK exports persisted and deepened from January 2021-March 2022.


According to the research, the UK has also experienced a significant contraction in the variety of goods being exported to the EU, with an estimated loss of 42% of product varieties. The researchers say this, combined with an increased concentration of export values to fewer products, has serious implications for the UK’s future exporting and productivity.


The authors are calling for an urgent national debate from politicians about the UK’s post-Brexit trade arrangements.


The researchers assessed the impact of the TCA, which allows goods to continue to be bought and sold between the UK and EU without tariffs in the wake of Brexit, by creating an ‘alternative UK economy’ model, based on the case that the UK had remained within the European Union. By comparing the model UK’s exports and imports with actual figures for the UK, they could accurately isolate the impact which the new trade rules were having.


“What we are seeing is the effect of Brexit on exports; and that is persisting. It’s not diminishing, and exports have yet to show signs of recovering,” says Professor Jun Du of Aston University. “Until this serious problem with exports is openly acknowledged and discussed, we won’t see any necessary actions being taken.”


Unlike exports, an initially significant drop on EU imports to Britain has recovered during the same period, suggesting that UK businesses and consumers have quickly adjusted to new rules. This stands in contrast to the persistent decline in UK exports, which the researchers believe is caused by more fundamental factors.


Professor Du said:


“It seems that the UK can buy, but it can’t sell – and that’s reinforcing the problem of Brexit. A reduction in import bottlenecks might help exports to rebound, but this recovery is likely to be offset by the rising costs of imports.”


Researchers found that as many as 42% of the product varieties previously exported to the EU have disappeared during the 15 months after January 2021. This, they say, is principally caused by a large number of exporters simply ceasing to export to the EU, while the remaining exporters are streamlining their product ranges.


Co-author, Dr Oleksandr Shepotylo, says:


“The product varieties that have disappeared are mostly those with low export value – we know this because the average export value increased as the number of varieties declined. These products are the ones typically exported by small firms or new exporters, or are exported to new markets. And It’s those smaller businesses that would normally export much more in future, as they grow their volumes and products – so that’s the UK’s future export pipeline being affected, which has bleak implications.”


Professor Du says:


“The evidence we present here shows the real loss of Brexit, the overall competitiveness of the UK as a global trader. The considerable contraction of the UK trade capacity, combined with an increased concentration of export values to fewer products, signify some serious long-term concerns about the UK’s future exporting and productivity. Debate is essential so that the UK can start to address its current challenges. Of course, no one is suggesting going back into the EU, but there are collaborations, conversations and discussions that must be had. If the UK’s political leaders don’t acknowledge the facts, they are setting the course towards even longer-term problems.”

Connect with:
Jun Du

Jun Du

Professor of Economics

Professor Du's main research interest is to understand the driving forces and impediments of productivity enhancement and economic growth.

EconomicsTrade

You might also like...

Check out some other posts from Aston University

3 min

Aston University researcher develops new optical technique that could revolutionise medical diagnostics

New light technique could revolutionise non-invasive medical diagnostics Orbital Angular Momentum could be harnessed to improve imaging and data transmission through biological tissues Could eventually have potential to make procedures such as surgery or biopsies unnecessary. An Aston University researcher has developed a new technique using light which could revolutionise non-invasive medical diagnostics and optical communication. The research showcases how a type of light called the Orbital Angular Momentum (OAM) can be harnessed to improve imaging and data transmission through skin and other biological tissues. A team led by Professor Igor Meglinski found that OAM light has unmatched sensitivity and accuracy that could result in making procedures such as surgery or biopsies unnecessary. In addition it could enable doctors to track the progression of diseases and plan appropriate treatment options. OAM is defined as a type of structured light beams, which are light fields which have a tailored spatial structure. Often referred to as vortex beams, they have previously been applied to a number of developments in different applications including astronomy, microscopy, imaging, metrology, sensing, and optical communications. Professor Meglinski in collaboration with researchers from the University of Oulu, Finland conducted the research which is detailed in the paper “Phase preservation of orbital angular momentum of light in multiple scattering environment” which is published in the Nature journal Light Science & Application. The paper has since been named as one of the year’s most exciting pieces of research by international optics and photonics membership organisation, Optica. The study reveals that OAM retains its phase characteristics even when passing through highly scattering media, unlike regular light signals. This means it can detect extremely small changes with an accuracy of up to 0.000001 on the refractive index, far surpassing the capabilities of many current diagnostic technologies. Professor Meglinski who is based at Aston Institute of Photonic Technologies said: “By showing that OAM light can travel through turbid or cloudy and scattering media, the study opens up new possibilities for advanced biomedical applications. “For example, this technology could lead to more accurate and non-invasive ways to monitor blood glucose levels, providing an easier and less painful method for people with diabetes.” The research team conducted a series of controlled experiments, transmitting OAM beams through media with varying levels of turbidity and refractive indices. They used advanced detection techniques, including interferometry and digital holography, to capture and analyse the light's behaviour. They found that the consistency between experimental results and theoretical models highlighted the ability of the OAM-based approach. The researchers believe that their study’s findings pave the way for a range of transformative applications. By adjusting the initial phase of OAM light, they believe that revolutionary advancements in fields such as secure optical communication systems and advanced biomedical imaging will be possible in the future. Professor Meglinski added: "The potential for precise, non-invasive transcutaneous glucose monitoring represents a significant leap forward in medical diagnostics. “My team’s methodological framework and experimental validations provide a comprehensive understanding of how OAM light interacts with complex scattering environments, reinforcing its potential as a versatile technology for future optical sensing and imaging challenges.” ENDS https://www.nature.com/articles/s41377-024-01562-7 Light: Science & Applications volume 13, Article number: 214 (2024) August 2024 https://doi.org/10.1038/s41377-024-01562-7 Authors: Igor Meglinski, Ivan Lopushenko, Anton Sdobnov & Alexander Bykov About Aston University For over a century, Aston University’s enduring purpose has been to make our world a better place through education, research and innovation, by enabling our students to succeed in work and life, and by supporting our communities to thrive economically, socially and culturally. Aston University’s history has been intertwined with the history of Birmingham, a remarkable city that once was the heartland of the Industrial Revolution and the manufacturing powerhouse of the world. Born out of the First Industrial Revolution, Aston University has a proud and distinct heritage dating back to our formation as the School of Metallurgy in 1875, the first UK College of Technology in 1951, gaining university status by Royal Charter in 1966, and becoming The Guardian University of the Year in 2020. Building on our outstanding past, we are now defining our place and role in the Fourth Industrial Revolution (and beyond) within a rapidly changing world. For media inquiries in relation to this release, contact Nicola Jones, Press and Communications Manager, on (+44) 7825 342091 or email: n.jones6@aston.ac.uk

2 min

Aston University researchers to explore using AI and fibre-optic networks to monitor natural hazards and infrastructures

Aston University is leading a new £5.5 million EU research project Will focus on converting fibre-optic cables into sensors to detect natural hazards Could identify earthquakes and tsunamis and assess civil infrastructure. Aston University is leading a new £5.5 million EU research project to explore converting existing telecommunication fibre-optic cables into sensors which can detect natural hazards, such as earthquakes and tsunamis, and assess the condition of civil infrastructure. The project is called ECSTATIC (Engineering Combined Sensing and Telecommunications Architectures for Tectonic and Infrastructure Characterisation) and is part of the Horizon Europe Research and Innovation Action (RIA), which aims to tackle global challenges and boost the continent’s industrial competitiveness. Converting telecom fibres into sensors requires new digital signal processing to overcome the limited data storage and processing capabilities of existing communication networks. To address this the project will use localised, high performance digital processing that will integrate artificial intelligence and machine learning. The researchers’ goal is to minimise algorithms’ complexity while providing extremely accurate real-time sensing of events and network condition. The new laser interrogation and signal processing technologies will be tested using existing fibre optic networks, including those underwater, in cities, and along railway infrastructure to assess their potential. Delivered by a consortium of 14 partners across seven countries, from academic and non-academic sectors, the research will start in February 2025 and will last three and a half years. The Europe-wide team will be led by Professor David Webb who is based in the Aston Institute of Photonic Technologies (AIPT). Professor Webb said: “There are more than five billion kilometres of installed data communications optical fibre cable, which provides an opportunity to create a globe-spanning network of fibre sensors, without laying any new fibres. “These traverse the seas and oceans - where conventional sensors are practically non-existent - and major infrastructures, offering the potential for smart structural health monitoring.” Professor Webb will be joined by fellow researchers Professor Sergei Turitsyn, Dr Haris Alexakis and Dr Pedro Freire. For media inquiries in relation to this release, contact Nicola Jones, Press and Communications Manager, on (+44) 7825 342091 or email: n.jones6@aston.ac.uk

3 min

EU-UK Trade Deal continues to stifle trade with 27% drop in exports since 2021

New report shows persistent stifling effects of the impact of the Trade and Cooperation Agreement on UK-EU trade relations Monthly data show a 27% drop in UK exports and a 32% reduction in imports to and from the EU between 2021 and 2023 Recommendations for policy interventions include to negotiate sector-specific deals, engage with individual EU countries, and work on reducing non-tariff barriers A comprehensive analysis by researchers at the Centre for Business Prosperity at Aston University reveals that negative impacts of the UK-EU Trade and Cooperation Agreement (TCA) have intensified over time. The new report, Unbound: UK Trade Post Brexit, also shows a 33% reduction in the variety of goods exported, with the agricultural, textiles, clothing and materials sectors most affected. To assess the impact of the UK-EU TCA, the authors analysed monthly import and export between the UK and the EU, from January 2017 to December 2023 and separated into pre- and post-January 2021 when the agreement came into force. The monthly data shows a 27% drop in UK exports and a 32% decline in imports from the EU. Lead author, Professor Jun Du of Aston University says: “The Trade and Cooperation Agreement introduced substantial barriers and there are ongoing and marked declines in the value and variety of UK exports and imports. Without urgent policy interventions, the UK’s economic position and place in the global market will continue to weaken.” The UK-EU TCA redefined trade and investment rules and market access between the UK and the EU. Since it came into force, the UK government has negotiated several trade agreements, but the EU remains the UK’s largest trade partner. Exports for most sectors have decreased since January 2021, although the impact is varied. Agrifood, textile and clothing and material-based manufacturing have been among the hardest hit, with substantial declines in both export value and the variety of products exported. At the same time, some sectors such as tobacco, railway and aircraft manufacturing have seen modest increases in varieties of products exported. On the import side, most sectors have shrunk in both value and variety, particularly agrifood products, optical, textile and material-based manufacturing. A few sectors, for example, ships and furniture, have demonstrated noticeable increases in import product variety. The large variations across different goods categories and EU trade partners underscore the uneven effects of Brexit and the TCA on UK-EU trade dynamics, highlighting the need to understand the nuances and come up with tailored strategies that address the unique challenges of each sector within the new regulatory environment. The researchers make recommendations, outlining how sector-specific negotiations, streamlining customs procedures with digital technologies and reducing regulatory divergence could mitigate some of the impacts. Dr Oleksandr Shepotylo, the report’s co-author says: “Our findings indicate a decoupling of the UK from key EU final goods markets, accompanied by a shift in UK supply chains toward geographically closer EU trading partners for exports and smaller countries for imports. “This shift raises concerns and underscores the urgent need for a strategic reconfiguration of UK supply chains to maintain competitiveness.” Professor Du continues: “The TCA has introduced considerable barriers to UK-EU trade, particularly through increased Non-tariff measures (NTMs). “Addressing these issues through targeted improvements to the TCA is crucial to ensuring that UK businesses remain competitive in the European market. A structured, multi-faceted approach is necessary.” To find out more about these findings, click here.

View all posts