A team from Aston University’s Centre for Business Prosperity analyse monthly trade data and find that the Trade and Cooperation Agreement has a stifling effect on trade between the UK and the EU.


The report reveals a 27% drop in UK exports to, and a 32% reduction in imports from, the EU, as well as a 33% decrease in the variety of products exported from the UK.

Their recommendations for policy interventions include the negotiation of sector-specific deals, engagement with individual EU countries, and working to reducing non-tariff barriers.


Report overview

This report provides a comprehensive analysis of the impact of the Trade and Cooperation Agreement on UK-EU trade relations, three years after the UK's departure from the EU Single Market and Customs Union.

The team analysed monthly import and export data 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. This revealed a 27% drop in UK exports to and a 32% reduction in imports from the EU, and a 33% decline in the range of goods the UK trades with the EU. These data suggest that the post-Brexit transition in UK-EU trade relations is not merely a short-term disruption but reflects deeper structural changes that are likely to persist. 

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 a modest increases in varieties of products exported. 

Imports for most sectors have shrunk in value and variety, particularly agrifood products, optical, textile, material-based manufacturing. A few sectors, for example, ships and furniture, have demonstrated noticeable increases in import product variety.  

Without changes in policy, there will continue to be negative impacts on the UK’s trade competitiveness. The authors recommend three areas of focus: mitigation of the adverse effects; strategic reconfiguration of UK supply chains; and, supporting firms in adapting to new trade barriers and enhancing productivity.

The key policy interventions they believe could result in positive changes are negotiating sector-specific deals, engagement with individual EU countries, and work to reducing non-tariff barriers. There are other improvements to be gained through streamlining of customs procedures with digital technologies, reducing differences in regulatory standards between the UK and EU, and investments in trade infrastructure such as facilities at ports and improving customs facilities.


Jun Du

Jun Du is Professor of Economics at Aston Business School, Aston University, and Founding Director of Centre for Business Prosperity. Jun also leads research on Internationalisation in Enterprise Research Centre. She is an expert on internationalization, innovation and productivity and serves on the Economic and Social Research Council Grant Assessment Panel for Economics and Management and is a member of the Council of Experts for the Innovation and Research Caucus. Jun is on the advisory board of British Chamber of Commerce Global Britain Challenge Group, Business Commission West Midlands Advisory Panel and WMGC internationalisation Strategy steering group, and the Midlands Engine Observatory Program Board.

Image
Jun.D

Oleksandr Shepotylo

Oleksandr Shepotylo is an Associate Professor at Aston Business School. He received his PhD in Economics from the University of Maryland, College Park, his Master in Economics from New Economic School. He previously worked at the World Bank, DEC RG Trade group, Kyiv School of Economics, Higher School of Economics, and the University of Bradford.

Oleksandr’s main research interests are in international trade, trade policy, and globalization. He has worked in a variety of topics such as the impact of trade liberalization on exports and productivity and the use of the structural gravity model to evaluate the gains from trade. He has extensive experience measuring and quantifying non-tariff measures and analysing trade policy impacts, advising governments about the effects of trade policy decisions in developing economies; more than 15 years of professional experience in statistical analysis of trade, both of WTO accession and regional trade agreements.

Image
oleksandr shepotylo

Xingyi Liu

Xingyi Liu is a Lecturer in Economics at Aston Business School and a member of Center for Business Prosperity. He previously worked at the University of Wuerzburg, Germany, after receiving his PhD in Economics from Toulouse School of Economics, France. His research applies economic theories in understanding issues in business management and public policy.

Image
xingyi liu

Yujie Shi

Yujie Shi is a Research Fellow at the Centre for Business Prosperity (CBP) at Aston Business School. She begins working at the CBP research centre after receiving her PhD in Economics from the University of Liverpool. Her research focuses on international trade and trade policy, and she is also expanding her research into web technology, applying it to the field of international business.

Image
yujie shi