What is really happening with exports to the EU?

There are various contradictory allegations going around about the current level of trade with the EU countries and what has happened to that trade since the Brexit transition period ended just before midnight on New Year's Eve.

None of these competing narratives are either confirmed or definitive at this stage and we will not know what has really happened to Britain's exports to and imports from the EU until the final trade figures are published for the quarter - any competent economist will tell you that fluctuations in monthly trade figures, especially the initial provisional ones, are not at all reliable as an indicator of what is happening as they can be distorted in either direction by the exact timing of a few particularly large payments.

Even when we do have some reliable statistics about what has happened to exports we will need to attach a health warning to any interpretation as to why. This ought to be a statement of the stunningly obvious, but judging by what has been written in the press it clearly does need saying: if there are changes in the level of trade it may be very challenging to disentangle what has been caused by COVID-19 and lockdowns, what has been caused by Brexit, and what is the result of other factors.

The striking figures being thrown around in the press at the weekend are not based on even provisional monthly trade statistics but on a survey by the Road Haulage Association which compared the number of goods vehicles passing through UK ports with goods for the EU in January 2021 as compared with January 2020. This is where the allegation of a 68% drop in exports comes from.

Further details of this survey have not been shared which makes it difficult to assess how strong a piece of evidence it is. But on one thing at least we can be crystal clear.

That 68% figure is based on a comparison of traffic movements during a month before most of us had heard of the word "Coronavirus " with movements at a time when Britain and almost all EU countries had restrictions in place on local and international travel and all the other restrictions of the current lockdown. Hence any arguments that Brexit has had this effect on exports to the EU should be taken not with a pinch of salt, not even with a cupful, but with a lorry load. 

By contrast the cabinet office had this to say yesterday about the number of goods vehicles travelling to the EU, as you can read on their website here:

"Flows are monitored on a daily basis by the Border Operations Centre. In the last full week (30 Jan to 5 Feb) both outbound and inbound flows (across all UK ports) were close to normal, at 95% outbound and 96% inbound, in spite of the impact of COVID lockdowns on trade."

The same page on the government website also contains the following:

"We are committed to ensuring that businesses get the support they need to trade effectively with Europe and seize new opportunities as we strike trade deals with the world's fastest growing markets."

"Thanks to the hard work put in by hauliers and traders to get ready for the end of the Brexit transition period, there are no queues at the Short Straits, disruption at the border has so far been minimal and freight movements are now close to normal levels, despite the COVID-19 pandemic.

As a responsible government, we made extensive preparations for a wide range of scenarios at the border, including the reasonable worst case. However, it appears increasingly unlikely that our reasonable worst case scenario will occur.

We know that some businesses are facing challenges with the new rules, which is why we are operating export helplines, running webinars with policy experts and offering businesses support via our network of 300 international trade advisers. This is on top of the millions we have invested in the customs intermediaries sector."

"We will continue to work constructively with the Road Haulage Association and other business representative organisations, including through the weekly Brexit Business Taskforce, to get them the tailored support to tackle any outstanding issues."

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