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EU economies have more to lose than the UK from curbs on trade

  • The jobs market of each EU nation is more dependent on trade with the UK than vice versa, analysis shows
  • Germany has 1.3m jobs linked to exports to the UK, which has only 751,000 linked to trade with Germany
  • In total, 3.6m British jobs linked to trade with the rest of the EU, while 5.8m EU jobs are linked to trade with the UK
The jobs market of every other EU country is more dependent on trade with the UK than vice versa, a new Civitas analysis shows today.

All but five of the 27 post-Brexit members have more jobs riding on exports to Britain than Britain has on exports to those countries.

As a proportion of the total working population of each country, the picture is even more stark: every one of the 27 has a larger share of its jobs market at stake in the forthcoming Brexit negotiations than does the UK with that country.

The findings have important implications for the forthcoming Brexit negotiations, demonstrating that each individual EU nation has much to lose from trade barriers between the Single Market and the UK.

The analysis shows that while 3.6 million British jobs are linked to trade with the EU, some 5.8 million EU jobs are linked to trade with the UK.

On a country-by-country comparison, the introduction of trade barriers would be less damaging to the UK than it would be to our EU partners.

Germany, for instance, has an estimated 1.3 million jobs linked to exports to the UK (3.2 per cent of all German jobs), while the UK has only 0.8 million jobs linked to exports to Germany (2.4 per cent of UK jobs). Similar comparisons hold true for all of the major EU economies.
Only five – Denmark, Finland, Ireland, Luxembourg and Malta – have fewer jobs linked to UK trade than vice versa. As a proportion of their jobs market, however, they too are more dependent on UK trade market than the UK is on them.

For a number of smaller countries, the number of jobs linked to trade with the UK is approaching one in ten. They include Ireland (9.51%), Malta (8.97%) Cyprus (8.82%), Belgium (7.82%).

The analysis also shows that even prior to the vote for Brexit UK exports to the EU had declined from 50 per cent of all UK exports in 2005, to 42 per cent in 2015. On existing trends, the share of UK exports going to the EU would fall to 38 per cent by 2020 and just 29 per cent by 2035.

Civitas research fellow Justin Protts, who conducted the analysis, said: ‘Each of the remaining EU countries has a higher proportion of their workforce employed in jobs that rely on UK trade than the UK has with that EU country.

‘Based on the potential impact on jobs, each EU country should be aware of the significant economic benefit in terms of jobs stemming from trade with the UK.

‘The EU does arguably have to negotiate as a bloc. However, each of the 27 remaining national government should be negotiating in the interests of those that democratically elected them.

‘The EU, overall, has a net of 2.2 million more jobs linked to UK trade and the Eurozone is still struggling with a highly unbalanced economy and fragile recovery following the 2008 crisis.

‘In addition to that, with the fall in the value of the pound, the UK has an increased competitive advantage which will allow it to do more to help UK business export outside the EU which can help offset exposure to a change in trading terms. The EU does not have such a luxury.’

Notes

The full analysis, ‘UK-EU trade and jobs linked to exports’, is published by the cross-party think tank Civitas on Friday, September 23.

A PDF of the report can be downloaded here. 

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