Impact of Brexit worse for the UK than it is for Belgium
A study by Leuven University (KUL) has shed light on the impact on trade that has been caused by the UK’s decision to leave the EU and the single market. Almost 4 years ago, on 1 February 2020 the United Kingdom ceased to be a member of the European Union and Great Britain (the UK without Northern Ireland) ceased to be a part of the European single market. Since that the impact of Brexit on EU-UK trade relations has raised questions and concerns.
The Leuven University (KU Leuven) study shows that while Brexit has had negative implications for Belgian trade, it has above all been the UK that has drawn the short straw. Economics professor Hylke Vandenbussche of KU Leuven has mapped the impact of Brexit on trade. She found that between 2018 and 2021 trade from the EU to the UK was around 18% lower that it would have been without Brexit. The gradual decline in trade started in 2016
Belgium’s goods exports to the UK fell by 13%. This equates to a 4-euro billion decrease in goods exports and between 28,000 and 32,000 fewer jobs. The estimated number of fewer jobs is based on 1 billion euro of output proving 7,000 to 8,000 jobs. However, these lost job opportunities resulting from Brexit have not necessarily been translated into actual job losses, as many were just reassigned elsewhere. Support from the regional and federal governments and the EU has helped enable businesses to seek new markets.
Service sector more resilient
The service sector in Belgium seems to have been less impacted by Brexit and also be more resilient to the shock caused by one of our major trading partners leaving the EU. Between 2016 and 2021 service industry exports from Belgium to the UK fell by only 0.5 billion euro. The travel sector, communication and construction services performed worse post-Brexit, while transport, financial services, insurance and computing services performed better.
Food and drink
Across the EU, exports of food and drink to the UK fell the sharpest. Exports of vehicles with petrol or diesel engines saw the second sharpest fall. Exports of pharmaceutical products, machinery parts, plastic items, optical products, and electric cars to the UK have seen a big rise since later 2019.
Professor Vandenbussche also found that although both sides have lost out because of Brexit the UK has suffered proportionally greater losses than the EU countries with which it trades.