In 2018 46% of UK goods and services exports went to the EU while 2% went to Africa. According to the Financial Times in 2018, Chinese goods exports to Africa were eight times larger than those of the UK and even bigger than the top three exporters — Germany, France and the US — combined.
Brexiters with an ambition to make Britain an exporting superpower may be surprised that the UK’s official second biggest global trade surplus in 2018 was with Ireland. The United States was in first place but it’s possible that Ireland should have the top rank as the US claims 2018 goods and services surpluses with the UK!
See also: The UK's best economic performance ever was in the period 1973-2018 when it was a member of the EEC/ EU
Britain's trade surplus with Ireland in 2018 was at £16.4bn but it is understated as 1) in services, companies such as Google and Facebook book most of their UK sales in Ireland which become Irish exports 2) in goods, tax-related overseas ‘contract manufacturing’ adds about 50% to the value of Irish custom-tracked exports, when for example the output at sister affiliates of US-owned Irish pharmaceutical affiliates, in the UK and other countries, become Irish exports.
Foreign multinationals dominate Irish exports and more than half the headline value is effectively fake.
The UK has had a total trade deficit every year of the past 20 while it has had a surplus in trade with Ireland every year from 1999.
In 2018, the UK’s exports of goods and services totalled £634bn and imports £665bn. The EU accounted for 46% of exports and 53% of imports. A deficit of £138bn on trade in goods was partially offset by a surplus of £107bn on trade in services in 2018.
The UK Office for National Statistics reported a 2018 goods and services surplus with the US at £45.8bn and a current account of the Balance of Payments surplus of £43bn. Meanwhile, the US Bureau of Economic Analysis (BEA) reported a US goods and services surplus with the UK of $18.6bn and a current account surplus of $65.7bn.
Which set of data are right?
There is also a data gap at EU level with Eurostat claiming a 2018 current account surplus of €210bn with the US while the BEA says there was a $4bn surplus.
Last year two economists at the German Ifo institute, Gabriel Felbermayr and Martin Braml, said “investigations and inquiries to the ECB, Eurostat, and different EMU central banks could not clarify how European figures are compiled.”
They added, “a comparison of US figures with respective German Bundesbank data points towards the credibility of US data.”
US bilateral data with EU countries are not reliable as in 2016 74% of the EU profits of US affiliates were located in the Netherlands, Ireland and Luxembourg.
In 2017 President Trump said he couldn’t find any country with which the United States has a trade surplus. While he didn’t try very hard, consistency of data between countries would be a good thing and may assist the Brexiters in seeing more clearly how steep a mountain has to be climbed.
The colourful Mini car above is an image issued by the British government. The Mini is built in the UK by the German car manufacturer BMW. Cars and vehicle parts made by foreign firms in 2018 accounted for both the biggest category of exports and imports — exports: 9.5% of the total with a value of £33.3bn; imports: 6.7% with a value of £33.0bn.
