UK losing up to £6.5bn a year in EU trade without post-Brexit product deal, IPPR finds

The UK is losing out on as much as £6.5bn a year in exports to the European Union because of the absence of a deal allowing manufacturers to avoid duplicate product testing, according to new research from the IPPR think tank reported by the Guardian.

The analysis found that a failure to align UK and EU testing standards has forced some companies to abandon exporting to the EU altogether or to set up subsidiaries inside the bloc, after successive UK governments failed to secure a mutual recognition agreement. The IPPR estimated the overall cost to the UK economy at around 0.18% of national income.

According to the findings, motor vehicle and parts exports would have been between £2.48bn and £3.42bn higher each year had such an agreement been in place. Electronic exports could have been between £1.17bn and £1.67bn higher, while pharmaceutical exports would have seen an estimated annual uplift of between £740m and £820m.

The IPPR's analysis is the latest in a series of attempts by researchers to quantify the trade costs of Brexit for the UK. The think tank's findings point to testing and certification requirements, rather than tariffs, as a significant ongoing barrier to UK-EU trade in these sectors.