LDN - Business

EU exports to Britain rise in June as they fall with rest of the world

[August 13, 2021] BRUSSELS (Reuters) -European Union exports to Britain rose in June after a volatile start to the country's first year outside the single market, while the bloc's exports to the rest of the world dropped slightly in the same month.

The EU statistics office Eurostat said on Friday seasonally adjusted exports to Britain increased by 4.7% in June on the month, whereas imports from the UK were "nearly unchanged".

The EU's growth in exports to Britain coincided with a 0.6% drop in the bloc's exports to the rest of the world on the month, Eurostat said.

The month-on-month rise in exports to Britain followed a plunge, surge and second drop earlier this year, which were also recorded in imports, as firms adapted to new trade requirements after Brexit. The EU's trade with the rest of the world has remained largely stable in the first half of the year.

On the year, non adjusted figures showed that the 27-country bloc recorded a 22.3% increase in exports in June for a total volume of 188.3 billion euros ($221.1 billion), and a 29.6% rise in imports resulting in a trade surplus of 14.8 billion euros, down from 20 billion euros in June 2020.

The smaller euro zone, which comprises 19 of the 27 EU members, recorded a nearly 22% increase of exports and a rise of almost 17% in imports on the month which resulted in a 18.1 billion euros surplus in June from 7.5 billion euros in May. In June 2020, the euro zone surplus was 20 billion euros.

TRADE WITH BRITAIN

In the first half of the year, EU imports of goods from Britain were nearly 20% below their levels in the same period of 2020 and in June and May were also lower than volumes recorded at the end of last year, Eurostat data showed.

The figures were at odds with data released on Thursday by the UK Office for National Statistics (ONS) which showed British exports to the European Union in May and June exceeded their levels immediately before it left the single market at the start of this year, excluding volatile trade in precious metals.

The discrepancy is partly due to a change in the way Eurostat calculates trade with Britain after Brexit.

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Containers and cars are loaded on freight trains at the railroad shunting yard in Maschen near Hamburg September 23, 2012. REUTERS/Fabian Bimmer/File Photo

When Britain was still part of the EU's single market, all goods which moved from Britain to an EU member state were treated as British exports.

But since the start of the year, goods which had an origin outside Britain - for example, goods made in China which are shipped into Britain and then on to the Netherlands - are now treated as imports from China rather than from Britain.

"Statistics Eurostat publishes for 2021 are not on the same basis as statistics for previous years," the ONS said last month.

"The larger falls seen in the Eurostat data over this time period will reflect not only changes in trade, but also the fact that imports are being recorded as being from different countries than was previously the case," it added.

Eurostat agreed with this interpretation of its data.

Partly due to this change in the methodology, non seasonally adjusted figures published by Eurostat on Friday showed EU countries imported from Britain in the January-June period goods worth 65.9 billion euros, 18.2% less than the imports recorded in the same period last year.

Exports instead rose by 5.5%, leading to an EU trade surplus with Britain of 69.6 billion euros in June, Eurostat said.

Eurostat figures show that in June the EU imported from Britain goods worth 12.6 billion euros and in May 11.5 billion euros, down from imports worth over 15 billion euros in each month of the last quarter of 2020.

($1 = 0.8514 euros)

(Reporting by Francesco Guarascio @fraguarascio in Brussels and David Milliken in London; editing by Philippa Fletcher)

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