Rejoining EU Customs Union Won't Fix Brexit Damage, Research Finds

AI Summary

Research by the Centre for European Reform finds that rejoining the EU customs union would only partially undo the damage caused by Brexit, with UK exports to the EU depressed by 12%.

The Brexit Trade Damage

Brexit has depressed UK exports to the EU by 12%, and rejoining the customs union would undo only a fraction of the damage, research shared with the Guardian shows.

UK Export Decline

A decade on from the referendum, economists John Springford and Anton Spisak, of the Centre for European Reform, have found that services sector exports to the EU are 7% lower than they would have been if the UK had remained in the EU, and goods exports are 16% lower.

The Data Analysis

UK exports to the EU have declined by 12% due to Brexit.
Services sector exports to the EU are 7% lower.
Goods exports to the EU are 16% lower.

The Impact Analysis

The hardest-hit sectors have been travel, finance and insurance, chemicals and pharmaceuticals, and agrifood. The research suggests that the overwhelming majority of the impact – 10% of the total 12% decline in exports – is accounted for by leaving the single market.

The Prediction

Rejoining the customs union alone would have a modest impact, eliminating the need for UK firms to comply with complex “rules of origin” to qualify for tariff-free trade. However, it would not benefit the hard-hit services sector, and the UK would lose the opportunity to pursue trade deals with non-EU countries.