{"id":1446,"date":"2018-01-11T08:00:03","date_gmt":"2018-01-11T08:00:03","guid":{"rendered":"http:\/\/blogs.sussex.ac.uk\/uktpo\/?p=1446"},"modified":"2018-02-09T12:17:36","modified_gmt":"2018-02-09T12:17:36","slug":"regional-services-exports","status":"publish","type":"post","link":"https:\/\/blogs.sussex.ac.uk\/uktpo\/2018\/01\/11\/regional-services-exports\/","title":{"rendered":"Leave-voting regions are \u201cmost exposed\u201d to Brexit services shock"},"content":{"rendered":"Share this article: <\/em> \"Facebook\"<\/a>\"twitter\"<\/a>\"reddit\"<\/a>\"pinterest\"<\/a>\"linkedin\"<\/a>\"mail\"<\/a>

\"\"\"\"11 January 2018<\/em><\/p>\n

Dr\u00a0Ingo Borchert<\/a>\u00a0is Lecturer in Economics and a fellow of the\u00a0UK Trade Policy Observatory<\/a>.\u00a0 Nicolo Tamberi is a Research Assistant in Economics for the Observatory<\/em><\/p>\n

The North East and West Midlands are the most reliant on the European market, sending around half of their services exports to the EU. Sources: Office for National Statistics (2017a); and authors\u2019 calculations.<\/p>\n

Two of the biggest Brexit-voting regions would be hit hardest by a potential fall in services exports upon leaving the EU, new analysis suggests.\u00a0<\/p>\n

While London is by far the biggest exporter of services, our latest Briefing Paper,\u00a0Brexit and Regional Services Exports: A Heat Map Approach<\/a> shows that the North East and West Midlands are the most reliant on the European market, sending around half of their services exports to the EU.<\/p>\n

The new \u2018heat map\u2019 by Dr Ingo Borchert and Nicolo Tamberi is the first to describe the rich pattern of UK regional services exports \u2013 and how reliant different regions and sectors are on the EU.<\/p>\n

Share of services exports to the EU in 2015, by region, quartile brackets<\/h4>\n

As well as regional differences, there are significant variations by sector. Services exports from the motor trade sector are primarily oriented towards the EU, for example, whereas professional services are exported mostly to non-EU destinations.<\/p>\n

The research also provides the closest estimate yet of the value of Britain\u2019s \u2018hidden\u2019 services exports \u2013 around \u00a350 billion a year is generated by services inputs into manufacturing goods, which are subsequently destined for export.<\/p>\n

The discussion around Brexit\u2019s potential impact tends to focus on goods trade, even though international trade in services is more important for the UK economy than for most other countries, the researchers say.<\/p>\n

Dr\u00a0Ingo Borchert<\/a>, Senior Lecturer in Economics at the University of Sussex and Fellow of UKTPO, said:<\/p>\n

\u201cWhile London is by far the biggest exporter of services to the EU, it also trades on a huge scale with the rest of the world, so is somewhat protected.<\/p>\n

\u201cOther regions are far more vulnerable. The North East and the West Midlands send nearly half of their services exports to the EU and thus their service sectors emerge as the most exposed to potential Brexit-related changes in market access conditions.<\/p>\n

\u201cThis is vital and timely analysis for our Brexit negotiators as they prepare for the most crucial talks our country has faced in decades.\u201d<\/p><\/blockquote>\n

Nicolo Tamberi<\/a>, Researcher at the UKTPO, said:<\/p>\n

\u201cIt is increasingly difficult to treat goods trade and services trade independently. More than half of the indirect services exports embodied in manufacturing exports from Wales, Yorkshire or the North East export go to the EU, thereby potentially rendering services exports contingent on goods market access.\u201d<\/p><\/blockquote>\n

These are the report\u2019s key findings:<\/p>\n