European official data (Eurostat) and UK official data (ONS) have shown a somewhat different picture on post-Brexit trade patterns.
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What's going on?
A thread...1/11
🚄🚚🇬🇧🇪🇺
What's going on?
A thread...1/11
...This discrepancy has been flagged by @thom_sampson ...2/11
https://twitter.com/thom_sampson/status/1384052894224187392?s=20
...the Eurostat data shows a significantly larger fall in UK to EU goods exports than the ONS data
(Note: this comparison doesn't include March - Eurostat data for that month isn't out yet though ONS's is)...3/11
...
(Note: this comparison doesn't include March - Eurostat data for that month isn't out yet though ONS's is)...3/11
...
...yet the EU to UK goods imports picture is much closer in both series...4/11
...Why?
The @ONS has put out a useful blog today looking at why there might be a divergence...5/11
blog.ons.gov.uk/2021/05/14/tra…
The @ONS has put out a useful blog today looking at why there might be a divergence...5/11
blog.ons.gov.uk/2021/05/14/tra…
...Since January ONS started using data from UK customs declarations to measure exports rather than (as previously) Eurostat's survey - but it carried on using Eurostat survey for imports.
That probably helps explains why the imports picture is closer than for exports...6/11
That probably helps explains why the imports picture is closer than for exports...6/11
...But what about that exports difference?
Well, it turns out the ONS measures exports by disregarding intra-company goods transfers - whereas Eurostat includes every item that crosses a border...7/11
Well, it turns out the ONS measures exports by disregarding intra-company goods transfers - whereas Eurostat includes every item that crosses a border...7/11
...To illustrate, ONS cites an example of a car company moving an engine between factories in different countries.
That would be registered as trade in the data by Eurostat but not by ONS...8/11
That would be registered as trade in the data by Eurostat but not by ONS...8/11
...It's a pertinent example because manufacturing exports do seem (as per @thom_sampson 's calculations) to be the big driver of the divergence between the two series...9/11
...ONS says "one approach is not better or worse than another" for measuring trade.
But if we think intra-company goods exports are just as important for UK firms and business as inter-company ones we might prefer the Eurostat approach of measuring *all* goods movements...9/11
But if we think intra-company goods exports are just as important for UK firms and business as inter-company ones we might prefer the Eurostat approach of measuring *all* goods movements...9/11
...and if leaving the single market and customs unions has undermined the position of UK factories within pan-EU corporate supply chains that's something we should want to track and recognise...10/11
...We will need to continue to monitor this, but it's at least arguable that the official ONS trade data is flattering the post-Brexit picture on UK goods exports to the EU.
ENDS
ENDS
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