The statistics below include all EU and EFTA countries except the UK
Europe is Britain’s most important trading partner by some distance. Seven of the UK’s top ten export destinations are in the EU (in order: Germany, the Netherlands, France, Ireland, Belgium, Spain and Italy), and total exports to the EU and EFTA accounted for around 16% of GDP in 2012. Seven of Britain’s top ten import markets are also in the region.
Million people - the size of the European market excluding the UK
Scotch Whisky Association: The EU is the industry’s single largest export market and is vital to the Scotch Whisky industry. Global exports in 2012 were worth £4.3 billion, of which sales to the 26 other EU member states accounted for £1.45 billion. France is the world’s largest Scotch Whisky market after the US, while sales in new EU states like Poland, Romania, Bulgaria and the Baltic nations are growing strongly.
Tesco: One of the largest supermarket chains in Central Europe and has been active in the region since 1994. The market leaders in Hungary and Slovakia and the second-largest player in the Czech Republic and Poland, the company’s revenues in the region exceed £9 billion per year and it has nearly 1200 stores.
Marks & Spencer: In recent years Marks & Spencer has expanded across Europe where the company now has 155 stores and has launched local internet shopping sites in 8 key markets across Western Europe. In addition to stores in established western markets like Ireland, France and Netherlands, Marks & Spencer has operations in a number of East European markets including Czech Republic and Poland.
Percentage of UK exports to EU & EFTA
The EU and EFTA are growing slowly. Their share of UK exports has fallen from 58% in 1998 to 50% in 2012 – and, with the rise of emerging economies, it is set to fall further. The decline in Europe’s share of trade has recently been exacerbated by the recession and Eurozone crisis, and, although it may stabilise in the years ahead, the long-term trend is nonetheless downwards.
Even so, the scale of Britain’s exports to the EU and EFTA is such that even a modest recovery in Europe would be positive for Britain.
Furthermore, expansion of the EU has made it an increasingly diverse trading bloc: parts of the eastern EU are growing more rapidly and represent an under-exploited trading opportunity. The countries that have acceded to the EU since 2004 have a combined economy the size of Spain and are forecast to grow faster than the EU average. The UK’s exports to the 13 accession countries account for 6.8% of its total exports to the EU and EFTA, against their 8.8% share of the region’s GDP (excluding the UK).
There is still much work that can be done to further deepen the Single Market and, even with the ‘four freedoms’, barriers to trade and investment still exist. For example, in services, untapped potential exists in sectors including e-commerce, professional services and transport, given that services only accounts for around one-fifth of all EU trade yet is responsible for over 70% of the EU’s GDP.
Size of the European economy