EU: UK Balance of Trade

Lord Spicer Excerpts

Wednesday 14th November 2012 Lords Chamber

Asked By

[Lord Spicer]

To ask Her Majesty’s Government what is their estimate of the United Kingdom’s balance of trade with the European Union, once shipments in transit through the ports of Antwerp and Rotterdam to non-European Union destinations are excluded.

[The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi)]

My Lords, in 2011 the UK’s trade in goods with the EU was in deficit by around £43 billion, while in relation to services UK trade was in surplus by around £16 billion, so the overall deficit was around £28 billion. I am unable to provide data excluding shipments in and out of Antwerp because under international guidelines firms are required only to state the final destinations of the goods they are exporting. Asking businesses to collect the detail of the journeys that goods take en route to their final destinations would significantly increase administrative burdens and hence push up costs.

[Lord Spicer]

That Answer confirms the fact that this country runs a trade deficit with the continent of Europe. To that extent, our membership of the European Union is of greater value to it than it is to us. Will that not considerably strengthen our bargaining position when we come to renegotiate the treaty of Rome?

[Baroness Warsi]

My Lords, I think that there are a number of assumptions in my noble friend’s question. I know that he has devoted many years to this subject, but there is an assumption that trade deficits are in themselves bad. We run trade deficits with some countries and trade surpluses with others. Running trade deficits and trade surpluses is the basis of free markets. I am sure that my noble friend would support that. On negotiations, I would say that there are many benefits to being a member of the European Union, so simply to assess the strength of that relationship on the basis of our trade figures is not the correct way forward.