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March 28, 2022
In its report the OIM, which is part of the Competition and Markets Authority, sets out the scale and importance of trade, which is likely to exceed £190 billion annually, between England, Scotland, Wales and Northern Ireland.
The report outlines the flow of goods and services across internal market borders, as well as offering new insights on the extent to which regulatory policies differ between nations in the UK. It also includes new evidence on the economics of the internal market. Key economic findings include:
- most businesses find it easy to trade across UK nations at present, with the extent of cross-border trading either staying the same or growing over the past year;
- the highest proportion of cross-border trade was in manufacturing and wholesale/retail, with each sector representing more than a third of total trade;
- Scotland, Wales and Northern Ireland trade more with the rest of the UK than with the EU or the rest of the world (England does not publish intra-UK trade data); and
- many markets are local and larger businesses are more likely to trade with other UK nations.
Following the UK’s departure from the EU, certain powers have been returned to the UK Government and the devolved administrations, increasing the possibility of regulatory differences between the four nations. Part of the OIM’s assessment of the internal market therefore focused on whether regulations made by the four governments have begun to differ from one another more since the end of the Brexit transition period on 31 December 2020.
The OIM found no evidence of substantial new regulatory differences emerging. However, it says, this is not unexpected at this stage and differences might appear over time as governments develop and implement their programmes.
Different policies in different administrations could have implications, both positive and negative, for cross-border trade including changes in the price, quality and choice of goods and services. The OIM has identified some sectors where some regulatory differences may be more likely, including: the environment, energy use, agriculture, animal welfare, food, drink and health, and some safety-related matters. To read the OIM’s press release in full and for a link to the report, click here.