Leaving the customs Union ... nothing to declare and nothing to be gained ...

Ten things every one should know about the pattern of UK trade … There is nothing to declare and nothing to be gained ... we analyse the pattern on UK trade in 2017 using the gravity trade model

1 The world is not that big a place …

For an international trader, the world is not that big a place. There are 195 countries in the world with which to trade. 193 countries are member states of the United Nations and two countries are non-member observer states: The two observer states are the Holy See and the State of Palestine.

2 The Top 50 countries dominate …

World GDP is estimated to be $80 trillion dollars in 2017. The top 50 economies in the world account for over 95% of world GDP in total. The UK trades with all of the countries amongst the top 50, generating total exports of ￡342 billion in 2017.

3 There are no new territories behind a magic wardrobe …

There are no new territories behind the magic wardrobe in a post Brexit world for truly global Britain. We are currently trading in some way shape or form with all of them.

4 These are the Countries are we relatively strong …

The UK over performs in the major EU countries like France, Germany and the Netherlands. The UK also over performs in trade with Singapore and Australia. Trade with the U.S.A. and Canada is adequately represented.

5 These are the countries which are the surprises in the UK Top 50 …

Qatar, Oman, Hungary, Morocco, Macedonia and Kuwait are surprisingly ranked in the UK top 50 trading countries …

6 There are countries in which we could do better …

Significant shortfalls in performance can be identified in trade with China, India and Brazil and to a lesser extent Russia. 

7 Membership of the EU does not explain the short fall …

Membership of the EU does not explain the shortfall. Germany does much better than the UK in the BRIC countries selling four times as much in dollar value terms last year.

8 German Exports to the BRIC countries were over four times higher than that of the UK last year … 

German exports to China were valued at almost $100 billion dollars compared to less than $25 billion for the UK. Exports to Brazil were valued at almost $10 billion compared to $2.5 billion for the UK. Exports to India for the UK were valued at $6 billion dollars, German exports to India were valued at $12 billion dollars.

Trade with Russia for the UK was worth just $4.4 billion dollars. For Germany, trade with Russia was valued at almost $30 billion dollars. 

9 Product mix and capacity may provide a better explanation of the comparative shortfall in UK performance … 

Product mix and capacity may provide a better explanation of the comparative shortfall in UK performance, neither of which will be enhanced by the decision to leave the EU. The decision to leave the EU will promote a shock to demand and supply in exports of lead sectors including Motor, Aerospace, Big Pharma and Textiles. 

10 The Gravity Trade Model works …

The *gravity model of international trade* in international economics is a model, in its traditional form, predicts bilateral trade flows based on the economic sizes, often using GDP and distance between two countries.

We analyse the top 50 export countries for UK trade in 2017. Using the data of exports in goods, country GDP and distance from the UK. The details are available on the Saturday Economist web site. This is the link 

https://intercom.help/the-saturday-economist/brexit/what-does-the-gravity-trade-model-tell-us-about-uk-trade

The model suggests size of country and distance are the dominant determinants of UK international trade flows. For more information check out the full post here …

Conclusion …

Analysis of UK trade and the Gravity trade model suggests there is no business argument, nor is there an economic argument to leave the EU. Neither is there an argument to leave the customs union, in fact quite the reverse. Check out the main article here

We divide the arguments for Brexit into four boxes, Social, Political, Economic, and Business. The Social, largely about immigration, the Political, about who governs Britain. argue about this as you will. For the economic and business case, we consider there is no argument to leave the EU and certainly no argument to leave the customs union.

No need for a ring fence around the Irish Sea, the existing ring fence around the EU customs union including truly global Britain will suffice. 

Dr John Ashcroft PhD BSc.(Econ) FRSA CBIM Forty years in business and international trade with a PhD in International Economics focussed on UK international trade flows.

You may say that I'm Remoaner, but I'm not the only one.