Britain’s trade links with the European Union
The United Kingdom’s trade links with the European Union are considerable. Official trade statistics show that the European Union is the destination of about half of all British goods exports.10 The share is a little lower if services exports are included too but is still a sizeable 45%. Given that total exports account for 30.5% of British output, this means that the value of all goods and services exports to the European Union are equal to 14% of the overall United Kingdom economy.
The trading links are bigger if we include the more than 60 countries that the United Kingdom trades freely with because they have a free trade agreement with the European Union. These include Switzerland, South Africa and Turkey. Taking into account Britain’s exports to these countries means that 63% of its goods exports are linked to European Union membership. (See Figure 3.)
The manufacturing sector of the economy is heavily reliant on exporting, but growth in the services share of the economy has left manufacturing accounting for an ever smaller share of the United Kingdom’s output. (See Figure 4.)