Brexit Britain may export lots of services, but selling things it makes is harder | Torsten Bell

For most of my career in economic policy, no one asked much about trade data—import and export developments. The topic just wasn’t that controversial.

All that has changed since 2016. Brexit made trade data great again – at least in the sense of putting it back at the center of policy. But for now this attention is creating political heat rather than the better understanding we need of where the UK economy is and isn’t performing.

The House of Commons recently debated the UK’s trade performance. The trade secretary Kemi Badenochpainted a broad picture: “The latest trade figures … should give everyone in this room cause for celebration and renewed pride in our country”, proving that Brexit has delivered real benefits, with trade in goods and services booming.

The problem? The UK’s trade in goods – such as cars, chemicals and alcohol – is terrible. Merchandise exports, far from booming, are down 17% since 2019 (you can make these numbers look less dire if you include trade in precious metals like gold, but you don’t – it doesn’t create economic value for the United Kingdom). Realizing we have a problem on this front is the first step to doing something about it, including having an honest conversation about reducing trade friction between the UK and the EU.

Recognizing our goods problem also eases the success of UK services. Since the end of 2019, our services exports have grown by 19%, maintaining our position as the world’s second largest exporter of services. We are talking about engineering, legal and research services, not just the banking stereotype. Globally, trade in services exceeds trade in goodsshowing where the UK’s future prosperity is likely to be built.

So forget Brexiter boosterism and excessive decline. With trade data back in vogue, how about listening to what they’re telling us?