In this article, we will present some of the most recent key UK government data into the goods and services that the UK imports and exports from the EU.
While the total amount of trade the UK has done with the EU has generally fallen since the early 2000s, the EU is still the UK’s largest trading partner with a share of around 50% of UK imports and around 40% of UK exports (or 46% of total trade). As such, the trading relationship that the UK has with the EU is of great importance.
It is worth pointing out that 2020 (the most recent year for good statistical data) was an exceptional year, due to the coronavirus pandemic. While the trade did still continue the volumes of certain types of goods and services that were traded were different from normal. Notably, trade-in fuels and trade-in goods and services that relied on the movement of people, such as travel and transportation, were reduced during 2020. Nonetheless, the data is still very relevant and does still demonstrate the main themes in the UK’s trading relationship with the EU.
In 2020, the UK exported a total of £251 billion worth of goods and services to the EU.
The top 10 goods exported from the UK to the EU in 2020 were:
The top 10 services exported from the UK to the EU in 2020 were:
Total exports to non-EU countries were £350 billion.
The top 10 EU Countries for UK exports are:
In 2020, the UK imported a total of £301 billion worth of goods and services from the EU.
Total imports from non-EU countries were £296 billion.
The top 10 EU countries for UK imports are:
As well as understanding what goods the UK trades with which countries in the EU, for many people (particularly those involved in trade in the EU) it is helpful to know what the biggest challenges are that UK importers and exporters face.
A study of 2017 found that there were some common themes amongst UK importers and exporters as to what the biggest challenges they faced were. These themes applied whether or not they were involved in trade with EU countries or countries outside of the EU as well.
Some of the main problems that were raised in the study were:
The biggest effect that Brexit has had on the exchange rate between the pound sterling and the euro is that it has caused an increase in the volatility of the exchange rate.
Unpredictability in exchange rates is a major cause of concern when doing business between different currencies. What businesses often look for most when planning business operations into the future is predictability. An unreliable exchange rate will be one fundamental feature of trade between the UK and the EU that many companies will look to avoid.
The following 19 EU countries all use the euro:
As well as these EU member states that use the euro, Andorra, Monaco, San Marino, and Vatican City all use it under agreements made with the EU despite not being members of the EU.
It should be pointed out that not all EU countries actually use the euro. While 19 EU countries do use the euro, 8 do not. This, in some cases, can make the foreign exchange requirements of companies that import or export to the UK more complicated than it would first appear.
The following EU countries do not use the euro:
It is worth noting that Sweden, Denmark, and Poland are all major trading partners of the UK that are based in the EU but do not use the euro.
The 10 biggest non-EU trading partner countries that the UK has are:
As we mentioned earlier, Bound is a specialist company that helps businesses that trade in foreign currencies to manage the issue of fluctuating exchange rates. For companies that have been conducting business in euros, the services of companies like Bound have been particularly useful in recent years.
Through Bound, businesses are able to fix the exchange rate for future dates. Rather than planning and committing to deals in foreign currencies and then simply waiting to complete a transaction at whatever the exchange rate happens to be at that time, it is possible through Bound to prearrange the exchange rate. That’s right… you simply fix the exchange rate in advance and are not left worrying about the possibility that exchange rates could change adversely.
The two basic deals that Bound provides are forward trades and option trades, which are both financial products that have been in use for a long time.
With a forward trade, the exchange rate is simply fixed for a future date. An option trade, on the other hand, is more like an insurance policy. With an option trade, the customer has the right to exchange currencies in the future at a certain rate, but they are not obligated to do so like they are with a forward trade. This means that if the exchange rate happens to move favourably over the course of time, it is still possible to benefit by exchanging currencies through the normal channels.
Traditionally, the use of forward and option trades have been confined to only the bigger businesses because the process of taking out either type of trade has been time-consuming, complicated, and expensive. Bound are able to provide forward and option trades at very little cost and they are now appropriate for use by businesses of all sizes. Additionally, as well as aiming to reduce the cost of businesses protecting themselves from fluctuating exchange rates, Bound also aims to make the process as simple and transparent as possible.