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Study Notes

UK Trade with Europe - The Rotterdam Effect

AQA, Edexcel, OCR, IB

Last updated 22 Mar 2021

Britain does a substantial amount of trade with the Netherlands and it has been claimed that this exaggerates the significance of UK trade with the EU. According to the latest trade data, in 2014, UK exports of goods to the Netherlands were worth £23.4 billion, 16% of total exports of goods to the EU.

Container ships loading and unloading at the port of Rotterdam

But how much of this is actually the sale of final goods and services to consumers in Holland? For example if a British business sells computer equipment to China but these products are shipped to China via the global hub port of Rotterdam, then these products are recorded as exports to the Netherlands. This means that the published volume of UK trade with the EU will be overstated.

In another example oil exported from Saudi Arabia to Rotterdam and re- exported to the UK may be counted as an EU import rather than a Saudi import.

In an analysis published in 2013, the UK Office for National Statistics reported that if all goods trade with the Netherlands is counted as EU trade, then 50.5% of UK exports go to the EU and 54.5% of imports are from the EU. If, to take an extreme assumption, all trade with the Netherlands is excluded from the EU total, these figures fall to 42.5% for exports and 46.7% for imports. If 50% of trade with the Netherlands is excluded, the figures are 46.5% for exports and 50.6% for imports.

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