Britain Crowned World’s Fourth Largest Exporter Overtaking Japan
UK’s Trade Performance Exceeds Expectations
In a remarkable feat, Britain has been crowned the world’s fourth largest exporter, surpassing economic powerhouses like France, the Netherlands, and even Japan. The news comes as a pleasant surprise amidst concerns that Brexit could hinder the UK’s international trade. However, the latest figures from the United Nations, the leading authority on trade data, paint a different picture, showcasing the resilience and competitiveness of the British economy on the global stage.
Services Sector Spearheads Export Growth
The UK’s impressive export performance can be largely attributed to the robust growth in its services sector, particularly in areas such as financial services, legal services, insurance, and education. These sectors have established the UK as a world-class economy, punching well above its weight in terms of trade.
Liam Halligan, GB News’ economics and business editor, shed light on the driving forces behind this export surge. “A big chunk of this increase in exports comes from the fact that the US has been exporting what we call liquefied Natural Gas (LNG) to Europe in order to replace Russian gas,” he explained. “America, now the biggest exporter of LNG in the world, just overtook Qatar. Those LNG gas exports come through the UK because we have better LNG docking ports, in Milford Haven in Wales and the Isle of Grain in Kent, than other European nations.”
Re-exporting US LNG Adds Value
The UK’s strategic position and superior infrastructure for handling LNG have allowed it to re-export a significant portion of the US’s LNG exports to Western Europe. This re-exporting process adds value to the UK’s export figures, contributing to its impressive trade performance.
However, Halligan pointed out a concerning aspect of the data. “Total goods exports actually fell 4.4% over the last year,” he said. “That’s the one bit of worrying news in these new statistics. Our goods exports include our manufacturing exports, and we are still a major manufacturer, as I said, but for me, that’s the one blot on the landscape.”
Competitiveness Holds the Key to Boosting Goods Exports
To boost goods exports and address the decline in this sector, Halligan emphasised the need for improved competitiveness. “Our skills shortage is now pretty serious,” he said. “There are lots of vacancies in the UK economy, even though there are quite a few people out of work, and there’s often what economists call occupational mismatch in those job vacancies.”
Additionally, the high cost of energy in the UK has been a significant impediment to the competitiveness of goods exports, particularly in the manufacturing sector. “The price that our manufacturers have been paying for energy has been eye-watering over recent years, and there’s not that much sign that it’s coming down fast,” Halligan noted.
A Paradoxical Economy
While the UK excels in technical and specialized sectors like financial services, bioscience, and life sciences, Halligan highlighted a paradox in the country’s economic performance. “When it comes to basic things like energy, transport, and housing, we’re like a developing economy upside down,” he remarked.
Despite the challenges, the UK’s export figures have remained robust, with exports to the European Union reaching record levels, partly due to the re-exporting of US energy and the continued demand for British services within the bloc.
The Fracking Debate and Energy Security
One of the most contentious issues surrounding the UK’s energy competitiveness is the debate over fracking, the process of extracting shale gas from underground rock formations. Halligan expressed frustration that one of the reasons for the UK’s high exports is the re-exporting of American liquefied natural gas, which was obtained through fracking – a practice that has remained banned in the UK for the past decade.
“Imagine if we’d have been using our own natural gas and exporting that,” he pondered. “How much higher could we be? Third in the world, perhaps?”
The fracking debate has reignited discussions around energy security and self-sufficiency, with proponents arguing that it could reduce the UK’s reliance on imported energy and potentially lower costs for consumers and businesses.
Conclusion: A Resilient Economy with Room for Improvement
Despite the challenges posed by Brexit and the global economic landscape, the UK has demonstrated remarkable resilience and competitiveness in its export performance. The country’s prowess in services sectors, coupled with its strategic position and infrastructure for re-exporting US LNG, has propelled it to the rank of the world’s fourth largest exporter.
However, to maintain and build upon this success, the UK must address key issues such as skills shortages, energy costs, and competitiveness in the goods and manufacturing sectors. By tackling these challenges head-on, the UK can unlock its full potential and further solidify its position as a global economic powerhouse.
As the world continues to grapple with economic uncertainties and shifting trade dynamics, the UK’s ability to adapt and innovate will be crucial in navigating these turbulent waters and securing a prosperous future for its export-driven economy.