Britain starts to distance itself and reduce dependence on Europe for trade
British exports to countries outside EU soar to record £80million as economy reduces dependence on Europe
New figures reveal exports rose 4.9per cent between April and June
Exports to non-EU countries have grown by 40per cent in past five years
By HUGO DUNCAN ECONOMICS CORRESPONDENT
PUBLISHED: 23:31, 9 August 2013 | UPDATED: 23:31, 9 August 2013
Britain’s exports to countries outside the European Union have soared to a record high as demand around the world grows, official figures showed yesterday.
The Office for National Statistics said exports rose 4.9 per cent between April and June to a record £78.4billion in a major boost to the recovering economy.
The surge in demand for goods stamped ‘Made in Britain’ was driven by countries outside the EU as manufacturers entered growing markets in Latin America and Asia.
Exports to non-EU countries have grown by more than 40 per cent over the past five years while sales to Europe have risen by just 3.1 per cent. Sales to China, India and Thailand have all more than doubled in that time.
Experts said the shift in trade away from Europe towards other markets ‘is great news for the UK economy’.
Business leaders said it gave David Cameron an opportunity to demand ‘a much better deal for Britain’ in negotiations with Brussels over membership of the European Union.
Exports to the EU rose by 2.3 per cent between April and June to £38.1billion.
But sales to non-EU countries jumped 7.5 per cent to £40.3billion – the first time quarterly sales to the rest of the world have topped £40billion. In June alone, exports to the EU fell 0.6 per cent to £12.8billion while sales to the rest of the world rose 10.4 per cent to £14.2billion, also a record.
Katie Evans, an economist at the Centre for Economics and Business Research in London, said: ‘Advanced economies are going to struggle to regain the growth rates they were used to before the financial crisis, and so the switch towards emerging markets is great news for the UK economy.
‘By tapping into fast growth elsewhere in the world the UK can secure a share of this new wealth for itself.’
Trade with countries beyond the EU is seen as crucial to Britain’s recovery as the crisis in the eurozone depresses demand close to home.
Matthew Elliott, chief executive of Business for Britain, a campaign group in favour of renegotiating the terms of UK membership of the EU, urged the Prime Minister to demand a better deal from Brussels.
‘With the failure of the euro depressing demand on the continent, and the success of the emerging markets in Asia and Latin America, it should come as no surprise British companies are increasingly looking outside the EU to do business,’ he said.
‘The onus is now on the Government to recognise that business focus is turning towards markets outside the eurozone and use this to leverage a much better deal for Britain in the upcoming renegotiation with Brussels.’
Although the UK’s share of world trade has shrunk in recent decades, manufacturers such as Rolls-Royce and BAE Systems remain global powerhouses and the value of exports has soared.
Jim O’Neill, the economist who coined the term BRIC to describe the emerging powerhouses of Brazil, Russia, India and China, said the benefits of being in the EU are dwindling.
He said: ‘Given the dramatic changes in world trade as a result of the emergence of the so-called BRIC countries, China especially, neither the EU or eurozone are as important trade or economic blocks as one might have thought. The benefits of being “in” are certainly not as strong as they might have once been.’
The surge in exports has helped narrow Britain’s trade gap with the rest of the world.
The goods trade deficit – exports minus imports – shrank to £8.1billion in June from £8.7billion in May and well below the £8.5billion expected by economists.
Nida Ali, economic advisor to the Ernst & Young Item Club, said: ‘This confirms the strength of the UK’s recovery.’