Unbound: UK Trade Post Brexit
Show abstract
Three years on from the 2021 UK–EU Trade and Cooperation Agreement, we analyse monthly UK–EU trade data from January 2017 to December 2023 and find that the TCA has had a stifling effect on trade between the UK and the EU: UK exports to the EU are 27% lower, imports from the EU 32% lower, and the variety of products exported 33% lower than they would otherwise have been. Agrifood, textiles and clothing, and material-based manufacturing are hit hardest, and the shifts appear structural rather than temporary.
A report on the impact of the 2021 UK–EU Trade and Cooperation Agreement, three years on. Using monthly UK–EU trade data from January 2017 to December 2023, split before and after the TCA took effect in January 2021, we find that the agreement has had a stifling effect on trade in both directions.
Key findings
- UK exports to the EU down 27%; imports from the EU down 32%.
- The variety of products exported down 33%.
- Agrifood, textiles and clothing, and material-based manufacturing see the largest falls in both export value and product variety. Tobacco, railway and aircraft manufacturing are rare exceptions with gains in export variety.
- On the import side, value and variety fall in most sectors — especially agrifood, optical, textile and material-based manufacturing.
- The shifts appear structural rather than short-term, and are likely to persist without policy change.
Policy recommendations
Mitigate the costs of the new arrangements, restructure UK supply chains strategically, and help firms adapt to new barriers and raise productivity — through sector-specific deals, engagement with individual member states, lower non-tariff barriers, digitised customs, closer regulatory alignment, and investment in port and customs infrastructure.
The report was cited in parliamentary questions.
Report: Centre for Business Prosperity, Aston University, 2024. With Jun Du, Xingyi Liu and Yujie Shi. Also available as an SSRN working paper.