A University of Birmingham study examined the degree to which EU regions were exposed to the possible negative trade-related consequences of Britain’s departure and found areas in the Midlands and north of England, many of which voted for Brexit, had the greatest exposure.
This appeared to contradict claims during the EU referendum campaign in 2016 that London benefited the most from membership.
Researchers from the university’s City Region Economic and Development Institute looked at regional variations in the share of labour income and GDP reliant on the EU.
The UK was found to be 4.6 times more exposed than the rest of the EU, with the majority of member states facing almost no exposure. An estimated 2.64% of EU GDP was at risk because of Brexit trade-related consequences, the report found, whereas 12% of UK GDP was at risk.
The report’s authors concluded that this left Britain in a very weak bargaining position in economic terms.
Parts of Ireland had levels of exposure similar to those in London and northern areas of Scotland, the regions of the UK with the lowest levels. The next most affected regions after Ireland were in Germany, the Netherlands, Belgium and France, while regions in southern and eastern Europe were barely affected.
“Mercantilist arguments popular in the UK media, which posit that the UK trade deficit with the rest of Europe implies that on economic grounds, other EU member states will be eager to agree a free trade deal with the UK, are not correct,” the report said.
“When we consider the real trade-demand impacts on the EU member states and their regions ... the emerging picture is very different.”
Prof Raquel Ortega-Argilés from the University of Birmingham said: “London is genuinely the most globalised part of the UK and as such less dependent on European markets for its prosperity.
“In contrast, many parts of the UK, especially in the Midlands and in the north of England, are heavily dependent on European markets for their trade and prosperity, but in fact these are the regions that voted for Brexit.”
The economic readjustments following Brexit, she said, “are expected to be more challenging and difficult for the UK’s weaker regions, in part because they are more dependent on European markets, but also because they are less resilient”.
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