Trade between the UK and the EU has been negatively impacted as a result of Brexit, according to new research from the Economic and Social Research Institute (ESRI).
The report estimates that there has been 16% decline in trade from the UK to the EU, while trade from the EU to the UK fell by 20% since January 2021 when Britain officially left the single market.
The paper examined how trade flows in goods between the UK and EU changed throughout the first year post-Brexit.
The findings are based on forecasted trade levels in a scenario where Brexit did not happen.
Researchers examined EU data on its trading levels with the rest of the world and combined it with statistics from the UK on its trade with the EU.
The ESRI isolated the “Brexit effect” from other drivers of change in trade including the Covid-19 pandemic.
It noted that the impact of Brexit on trade levels can vary depending on the data source used for analysis.
The paper outlines that there was strong growth in EU imports and export trade with the rest of the world in the aftermath of the pandemic.
However, the ESRI said that UK export trade globally has experienced much slower growth, while imports from the rest of the world increased considerably.
Prior to Brexit, the EU accounted for almost 54% of total UK imports, falling to 46% in 2021.
Across EU member states, the ESRI found that Brexit has led to a decline in trade with the UK in almost all cases, although by varying magnitudes.
The study found a substantial reduction in the number of products traded from the UK to the EU.
It said that three quarters of the estimated fall in trade from the EU to the UK can be attributed to changes in trading costs and tighter margins.
When it comes to Ireland, the research noted that there was “no significant change” in trade going to the UK following Brexit. However, some of this may be attributed to a growth in trade with Northern Ireland.
The research found a 40% decline in trade coming from the UK into Ireland.
“Ireland is a substantial outlier, with one-third of its imports coming from the UK in 2015, with closely integrated wholesale and retail sectors an important factor.
“This had reduced to 28% in 2019 before falling further to 19% after the UK exit from the EU,” the study found.
