1. Key points concerning trade and Brexit
Trade in goods unhindered by border checks and costs of tariffs (never mind quotas) is essential to competitive and profitable businesses and for fast and integrated circuitry of capital
More than ever true with just–in–time intra–corporate supply
chains
Unhindered (uncontrolled) movement of money–capital is required by internationalised financial and industrial corporate capital for lending, borrowing, investing, repaying loans and interest, and ‘repatriating’ profits
C.f. Mercantilism and neo–mercantilism

2. Key points concerning trade and Brexit
In trade, EU is divided into surplus and deficit countries:–
Germany has, overwhelmingly the largest surplus in the EU
Followed (at a distance) by Holland, Italy, Denmark, Spain,
Sweden, and Ireland
The surpluses of surplus countries are mirrored by the deficits of
deficit countries
C.f. Mercantilism and neo–mercantilism
The UK has, overwhelmingly, the largest trade and current account deficits in the EU
It also has, overwhelmingly, the largest surplus in ‘services’ – largely the result of its surplus in ‘financial services’

3. Key points concerning trade and Brexit
Out of all EU members, Britain has the lowest percentage of trade with other EU countries
About 45% of its trade is with other EU countries
About 55% with non–EU countries
Compare with Germany: nearly 60% with EU countries; just over 40% with non–EU
• Britain is, nevertheless, highly integrated into the EU through its
trade – 45% is a very high proportion of its trade!

4. Key points concerning trade and Brexit
The next largest trading partner apart from the EU is the USA –
nearly 15% of UK exports went to the US in 2016
Trade with other countries accounts for very small percentages
of total UK trade –
E.g., trade with China = 4.4%
Canada = 1.5%
India = less than 1.5%

5. Key points concerning trade and Brexit
Overall, the UK has a very large trade deficit in goods – both
globally and with the EU
However, it has a large surplus in ‘services’ again both
globally and with the EU
This surplus comes from surpluses in ‘financial services’ and ‘business services’ – essentially investment banking and insurance, and accountancy etc.
The business of the City of London – ‘the City’
Add to this, the revenues from interest on loans, and various speculative gains (or losses!) from investment banking
Financial services and insurance account for for almost
a quarter of total UK exports

6. Some Brexit conclusions:–
1. The UK won’t lose all its trade with the EU – even with a hard Brexit
Even if we lose only 2%, this means a loss greater than UK’s total trade with countries such as Japan, Canada, and India
Compensating for this would require a major shift in markets and breaking into established markets
Is the UK competitive enough? Implications: either large increases in productivity, or significant cost reductions. Implications for wages and deregulation …..
2. Major UK MNCs (multinational corporations) are integrated across the EU through disaggregated
production and supply chains. They are essentially embedded in the
EU as a market
Cheaper and simpler for them to move their UK production facilities to another EU country?

7. Some Brexit conclusions (cont.)
3. The UK’s trade deficit with the rest of the EU
The very large trade and current account deficits mean that the UK is important to the rest of the EU – especially Germany
This is an important bargaining counter in negotiations? The EU will not want to lose too much of the UK market for its exports
This gives the UK a chance to gain on issues important to itself – e.g., financial services…..

8. Some Brexit conclusions (cont.)
4. Regarding financial services and ‘the City’:–
Hard Brexit = loss of the EU ‘financial passport’
Relatively easy for banks and financial services to move HQs to other EU countries to keep the passport
Other EU countries and cities (Frankfurt, Paris, Amsterdam, Dublin) see an opportunity to get jobs, income, and trade surpluses….
However, outside EU – lighter regulation of banking and finance = competitive access to other markets?
Remember 59% of UK financial services are already exported non–EU