New research indicates that Brexit has led to a significant 12% decline in UK exports to the EU, with the majority of this impact stemming from leaving the single market. Economists from the Centre for European Reform highlight that while rejoining the customs union could alleviate some trade barriers, it would not address the deeper issues affecting the services sector, which has seen a 7% drop in exports.
The study reveals that the regulatory costs associated with Brexit, such as new compliance checks, have had a more detrimental effect on trade than customs-related challenges. Sectors like travel, finance, and agrifood have been particularly hard hit, suggesting that the ramifications of Brexit are more complex than previously understood.
As political discussions around the UK’s relationship with the EU intensify, especially within the Labour Party, the findings underscore the limited benefits of merely rejoining the customs union. The research suggests that a more comprehensive approach, potentially involving rejoining the single market, would be necessary to recover lost trade.
However, such a move would require accepting free movement of people and adhering to EU regulations without a say in their formulation, raising significant political challenges. The ongoing debate reflects the broader implications of Brexit on the UK economy and its future trade relationships.
Source: The Guardian
