For most of my career in economic policy, no one asked much about trade data – about developments with imports and exports. The subject just wasn’t that controversial.
That’s all changed since 2016. Brexit has made trade data great again – at least in the sense of reinserting it into the centre of politics. But so far that attention is creating political heat, not the greater understanding we need of where the UK’s economy is, and is not, performing.
The House of Commons recently debated UK trade performance. The trade secretary, Kemi Badenoch, painted in big picture terms: “The latest trade data… should give everyone in this House cause for celebration and renewed pride in our country,” making the case that Brexit had delivered real benefits, with both goods and services trade booming.
The problem? The UK’s trade in goods – such as cars, chemicals and booze – has been terrible. Goods exports, far from booming, are down 17% since 2019 (you can make those numbers look less awful if you include trading in precious metals like gold, but you shouldn’t – it doesn’t create economic value for the UK). Understanding we have a problem on this front is the first step to doing something about it, including an honest conversation about reducing UK/EU trade frictions.
Recognising our goods problem also puts into relief the UK’s services success. Since the end of 2019, our service exports are up 19%, maintaining our position as the world’s second largest service exporter. We’re talking the likes of engineering, legal and research services, not just the banking stereotype. Globally, services trade is outgrowing that of goods, showing where the UK’s future prosperity is likely to be built.
So forget the Brexiter boosterism and overdone declinism. Given that trade data is back in fashion, how about we listen to what it’s telling us?
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