Teaching activity

In the News Teaching Activity – what are the UK’s strengths in international trade? (July 2024)

Elizabeth Veal

1st July 2024

UK in a Changing Europe have scrutinised the UK’s recent trade performance and found some strengths in the changing pattern of trade post-Brexit.

While Brexit has likely impacted the UK’s trade patterns, recent events such as the pandemic, cost-of-living crisis and geopolitical turmoil have also all played a role in reshaping some aspects of UK trade. As countries adjust their supply chains to make them more resilient to shocks like COVID and the Russia-Ukraine war and as the USA-China relationship has cooled, protectionism has increased. Brexit put up non-tariff barriers for UK trade with the EU, but some aspects of UK trade have nonetheless performed surprisingly well. There has been a boom in ‘other business services’ trade, a category that includes legal services, management consultancy, accountancy, architecture and R&D. While the UK’s service exports have grown rapidly compared to comparable developed countries, trade in goods has been much weaker. Indeed, overall, the UK’s international trade performance is not one of great strength.

UKICE-Trade-Report.pdf (ukandeu.ac.uk)

1 Using the information in the report, assess whether the UK has a comparative advantage in trade in ‘other business services’.

2 Using the Chart ‘UK services trade has grown relative to other OECD countries’ (end of page 6) and the Chart ‘Growth in UK goods trade has been weak’ (on page 7), identify the trends in UK goods and services exports and imports since 2016.

3 Why has the UK’s trade in goods been weaker than trade in services since 2016?

Download our suggested answers for this resource here

Elizabeth Veal

Liz has taught Economics for over 25 years, including several years as Head of Economics at leading schools.

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