Overseas Trade

Britain is fully committed to an open multilateral trading system. It exports more per head than the United States and Japan; overseas sales of goods and services are equivalent to about a quarter of its GDP. Invisible earnings of British companies place Britain in the top three countries in the international league table of overseas invisibles earners. It is the world's second biggest overseas investor and the leading destination for inward direct investment into the EU.

On 1 January 1994 the EU implemented an agreement with Austria, Finland, Iceland, Norway and Sweden on the creation of the European Economic Area (EEA). The EEA forms a free trade area with 380 million consumers, where there is free movements of goods, services and capital. The new World Trade Organisation was set up on 1 January 1995, providing a sounder basis for international trade, including implementation measures agreed during the recently completed GATT Uruguay Round of negotiations.

In 1993 Britain's exports of goods were valued at about ₤ 121, 400 million and its imports of goods at ₤ 134, 600 million. Manufactures account for 82 per cent of visible exports with machinery and transport equipment contributing about 40 per cent of exports. Aerospace, chemicals and electronics have become increasingly significant export sectors, while textiles have declined in importance. The share of fuels in exports was 7 per cent in 1993. North Sea oil and gas production has now passed its mid-1980s peak, when exports of fuels accounted for over 20 per cent of total exports. In 1993 the surplus on trade oil amounted to a little under ₤ 2, 500 million.

Britain's overseas trade is mainly, and increasingly, with developed countries. In 1972, the year before Britain joined the European Community, around a third of its trade was with the other 11 countries which made up the European Union in 1994. The proportion rose to around one-half in 1993. Western Europe as a whole takes three-fifths of Britain exports. EU countries accounted for seven of Britain's top 10 export markets and six of the 10 leading suppliers of goods to Britain in 1993. In 1990 Germany overtook the United States to become Britain's biggest overseas market; Germany is also Britain's largest single supplier. In 1993 it took 13 per cent of Britain's exports and supplied 15 per cent of its imports.

Exports to Japan, which is presently Britain's tenth largest export market, rose by 19 per cent in 1993. Japan has steadily increased its share of Britain's imports and now accounts for around 6 per cent. In 1993 there was also a sizeable increase - about 30 per cent - in Britain's exports to other expanding markets in the Asia-Pacific Rim. Hong Kong, Malaysia, Singapore, Korea, Taiwan and Thailand, together with the People's Republic of China and the Philippines, all showed strong growth in exports from Britain in 1993.