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VALENTINA ROMEI: The UK is planning to redesign its trade relationship with the European Union after 44 years of membership. And it's not going to be easy. The European Union is by far Britain's main trading partner. The value of UK goods sold to the EU is about the same as the export to all other countries combined and the same is true for imports.
The value of the country's car exports to the EU is about three times larger than that to the US. The gap is even bigger with other products, including aircraft. This is because the UK supplies parts and components to a mostly European supply chain, and goods are traded several times across the borders before finally being assembled.
The UK is breaking up with its main trading partner, when its second largest partner, the US, is moving toward protectionism. And the US is particularly protectionist when it comes to costs and grants, Britain's main export to the US. The idea that British trade with other markets outside the EU will boom once the country leaves the union is in contrast with its currently weak trade position.
Germany is part of the EU, but it's market penetration is about double that of the UK in most markets, including the Commonwealth countries. Of course, goods trade is only part of the story and not the most profitable. Although, the UK runs a large goods trade deficit. It exports more services that it imports. So it has a large and widening services surplus. But services are a key part of the same supply chain and unsurprisingly, the EU is the UK'S largest market for services, not just goods.
