PRESS ROOM

With two European subsidiaries, one of which is in the UK, and a network of long-standing partners across the continent, the U-Freight Group notes a new report from Aston University, which states that the UK’s trade with the EU has fallen following its exit from the bloc, while the Trade and Cooperation Agreement (TCA) has caused “severe disruptions in the UK-EU supply chain.

The disruptions caused by the agreement, struck as the UK left the EU, have been particularly pronounced in “consumer and intermediate goods”, say the authors of the report, which examined trade data up to 2023.

On the EU’s side, smaller nations have felt a more pronounced impact from a decline in UK exports than larger European nations.

From 2021 to 2023, the report says, “monthly data show a 27% drop in UK exports and a 32% reduction in imports to and from the EU”.

“Even when considering annual data to smooth short-term fluctuations, the declines remain substantial — 17% for exports and 23% for imports.”

The TCA itself is having “profound and ongoing stifling effects” on UK-EU trade, it adds. The disruption to supply chains has been “heavy”, while there has been a shift towards local production in the UK as it decouples from EU supply chains.

However, “despite the TCA’s dampening effect on UK exports, the UK remains dependent on the EU for intermediate and capital goods”.

The report’s authors also contend that the effects of the TCA, compared with EU membership, are worsening over time:

“The negative impacts of the TCA have intensified over time, with 2023 showing more pronounced trade declines than previous years. This suggests that the transition in UK-EU trade relations post-Brexit is not merely a short-term disruption but reflects deeper structural changes likely to persist.”

UK exports to non-EU markets have increased, likely as a result of non-tariff measures and rules of origin restrictions, the report adds. This has been particularly pronounced in the agrifood, wood, textile and footwear industries.

The authors note that their previous research has found that UK exports have fallen “not only in total trade value but also in the variety of exported goods”, which has had an effect on trade with both the EU and the rest of the world.

“These findings point to a broader decline in UK trade competitiveness and highlight the significant challenges UK firms are facing.”

The report’s authors propose “targeted improvements” to address the “crucial” but “formidably difficult” challenges raised by the TCA.

There is also a need to address inefficient and overly complex customs procedures by embracing digital trade, the report suggests.

The U-Freight Group wholeheartedly agrees that this modernisation should be a priority in any future negotiations with the EU, ensuring smoother trade flows and expanded market access for UK exporters.

The full report can be read here: https://www.aston.ac.uk/sites/default/files/2024-09/Full%20Report.pdf

For more information about the U-Freight Group's  European network and the freight forwarding and logistics services ir provides, please visit the relevant pages of this website or contact your local office, details of which can be seen here: https://www.ufreight.com/en/location