The Office for National Statistics (ONS) have released new data about UK services trade over the past couple of years. The data shows that UK service exports and imports have declined since Quarter 1 2019, with EU trade falling more than non-EU trade.
In Quarter 1 2021, total service exports decreased by 11.7% compared with pre-pandemic levels in Quarter 1 2019, with imports decreasing by 24.2% over the same period.
EU trade has declined more steeply than non-EU trade, with service exports to EU countries decreasing by 14.7% and imports by 38.8%.
Compared with the same period, services trade with non-EU countries declined to a much lesser degree, with exports to non-EU countries having declined by 9.9% and imports by 11.3%.
The ONS concluded that “while coronavirus (COVID-19) appears to have had the greatest impact on reduced level of trade in services, the end of the EU transition period brought about important changes to trade regulations governing trade in services between the UK and the EU.”
Responding to recent ONS trade statistics, William Bain, Head of Trade Policy at the British Chambers of Commerce, said:
“The pandemic and the shift to new trading conditions in how UK companies sell services to the EU have led to a clear reduction in UK-EU services trade compared with 2019. Today’s ONS data release shows services trade with the EU fell at a brisker rate than trade with the rest of the world over the two years to the end of March 2021. Services exports to the EU fell by 14.7% in that period and imports by 38.8%.
“Today’s statistics indicate that the effects of the pandemic have masked the real long-term impact of the UK-EU TCA on trade in services, particularly in relation to business travel and supply of services. As economies reopen the effects of these issues will be slow burning, but nevertheless felt increasingly by companies operating both in the UK and Europe.
“The UK government should seek to be ambitious in a common agenda with the EU on mutual recognition of professional qualifications, building more flexibility around the TCA for business travel, and liberalising reservations on services access to help kickstart our economic recovery from Covid-19.”
To read the full data release, visit the ONS website.