Gateways to growth
Exports can rebalance the economy
David Leighton
The UK’s decision to leave the European Union is a historic moment for the country. While some have been quick to interpret the result as a rejection of globalisation and free trade, others point to the opportunities that such a rupture presents. Government should see this break from the status quo ante as a unique chance to address the major imbalances in the UK economy, both regionally and in terms of the balance of trade.
Despite a proud history of international trade, in recent times the UK has fallen behind other major economies. In 2016 the UK ranked ninth as an exporter of goods, just ahead of Belgium and behind China, the US, Germany, Japan and the Netherlands. On the other hand, the UK had the fourth largest share of imports. As a result the UK’s balance of trade in goods ran at a deficit of $183bn. This is in part a function of the diminished role of manufacturing in the UK economy, accounting for just 10 per cent of GDP compared to 23 per cent in Germany. Fundamentally, the UK no longer makes enough products which the rest of the world wants to buy. A bold industrial strategy with a focus on boosting manufacturing and exports can help to address this, and the nation’s ports have a key role to play.