EU-UK trade flows under scrutiny: European Parliament report reveals continuities, changes, and challenges

 

The document, prepared at the joint request of the commissions of Foreign Affairs (AFET) and International Trade (INTA), analyzes the data for 2023 and 2024 in the context of the implementation of the ACC, complementing a previous study by the European Parliamentary Research Service (EPRS) which examined the first two years of the agreement.

 

The report, which responds to the European Commission's assessment of the implementation of the ACC, highlights a greater complexity in the commercial relationship compared to the UK's EU membership. While implementation of the PCA has generally been considered smooth, with a few exceptions, the analysis reveals that the The impact of the agreement remains more significant for the United Kingdom than for the EU.

 

The study finds a Slight decrease in trade in goods between the EU and the UK during 2023 and 2024, still remaining below pre-Brexit levels. In contrast, trade in services (excluding financial services, not covered by the ACC) shows greater resilience, exceeding pre-pandemic levels in 2023.

 

The report highlights greater complexity in the trading relationship compared to the UK's time as a member of the EU.

 

 

The report also contextualizes these trade flows in a global scenario marked by the uneven recovery from COVID-19, the impact of Russia's war in Ukraine and persistent inflation. It is noted that the The UK has experienced a less robust economic recovery than the EU-27 in the face of these challenges.

 

At a time of uncertainty in global trade policy, with geopolitical instability and the shadow of possible new tariffs by the US administration, the report highlights that the The PCA represents a crucial opportunity to deepen trade relations between the EU and the UK..

 

This analysis will serve as the basis for a joint report by the AFET and INTA committees on the implementation of the CPA, the ultimate goal of which is the comprehensive review of the agreement scheduled for 2026, five years after its entry into force, as stipulated in Article 776. The focus now turns to how both parties will leverage this assessment to optimize their trade relationship going forward.